How local governments can attract companies that will help keep their economies afloat duringCOVID-19

As companies labor to stay afloat amid the coronavirus pandemic, some businesses that feel hemmed in by local or statewide workplace safety mandates have threatened to relocate to more accommodating locations. Before the pandemic, governments offered packages of tax breaks, grants and loans to entice businesses to relocate and encourage businesses to employ more people. Tax deductions allow companies to invest earnings in production and output. Economic theory suggests that the increased employment and consumption that results will spur higher rates of economic growth than what the government could have…

Read More

Five graphs that show how uncertain markets are about the coronavirus recovery

Financial markets can tell us a lot about the economic recovery ahead, based on their direction of travel and how confident investors feel about the future. This is important as we emerge from the COVID-19 pandemic. There is much debate about whether the economic recovery will be a V-shape, indicating a short-lived economic downturn with a quick return to previous levels of output. Or if the recovery will take longer, following a U-shape. Or it could be more like an L-shape, with no near-term recovery and ultimately taking many years…

Read More

The IMF’s $4bn loan for South Africa: the pros, cons and potentialpitfalls

The International Monetary Fund (IMF) has approved a R70 billion (US$4.3 billion) loan for South Africa to help the country manage the immediate consequences of the fallout from COVID-19. The Conversation Africa’s editor, Caroline Southey, asked Danny Bradlow to shed some light on what South Africans should expect. What conditions has the IMF attached to the disbursement? The IMF has provided the funding through its Rapid Financing Instrument. This is designed to support countries facing an urgent need for financing due to a crisis such as the COVID-19 pandemic. The…

Read More

Five top tips for managing your personal finances duringcoronavirus

When it comes to money, coronavirus has split the nation. Financial stress dominates for many of the 9.5 million employees on furlough, potentially facing unemployment as the scheme unwinds, and for those whose small businesses have been disrupted or whose finances were already precarious before the crisis. By contrast, if you are one of the lucky ones whose income has been uninterrupted, you may have found that your spending has dropped and, as a result, you might have been able to pay off debts and even build up your savings.…

Read More

Why the African free trade area could be the game-changer for the continent’s economies

Most economists see structural transformation as one of the main routes to Africa’s sustainable development. What it means is changing the share of agriculture, manufacturing and services in an economy. It is a central aim of the African Union’s Agenda 2063. With this aim in mind, economists and policymakers need to know what determines structural transformation. They have flagged factors like demand for goods and services, trade policies, financial development, institutional quality and economic integration. But researchers haven’t closely examined the way economic integration through trade and finance influences structural…

Read More

300 years since the South Sea Bubble: the real story behind the iconic financialcrash

Coronavirus has caused a great deal of stock market turbulence and, somewhat inevitably, comparisons have been made to the volatility caused by the South Sea Bubble 300 years ago. This was the moment when, in 1720, share prices in London boomed and then fell sharply. It is thought of as a major economic disaster and huge scandal. In reality, it was a scandal but not much of a disaster. While some investors lost out from the speculation, it did not make much of a dent in the wider economy, unlike…

Read More

How commodity exporting countries like Ghana have been hit byCOVID-19

Ghana generates over 80% of its export revenues from three primary commodities – gold, crude oil and cocoa exports. It is classified by UNCTAD as commodity dependent, making it vulnerable to sharp drops in commodity prices. Since the COVID-19 pandemic demand for oil dropped precipitously due to a sudden reduction in industrial production, trade, travel, and movement of freight. Prices fell dramatically as a result. Revenues from the newly established oil and gas industry have had a profound impact on Ghana’s macroeconomy, even though oil and gas accounted for just…

Read More

Lessons from Igbo trans-generational entrepreneurship: why itmatters

The Igbos are one of Nigeria’s three main ethnic groups in a country of about 200 million. Based in Southeast Nigeria, this industrious and acephalous group has attracted a lot of attention from research in recent years. Most of it has focused on the success of Igbos in artisanal enterprise and informal training. Now their apprenticeship system has become a talking point. Most of the research on the Igbos’ success in business has been through the traditional cultural lenses of anthropology and sociology. My co-authors and I have sought to…

Read More

The next big financial crisis could be triggered by climate change – but central banks can preventit

In 2008, as big banks began failing across Wall Street and the housing and stock markets crashed, the nation saw how crucial financial regulation is for economic stability – and how quickly the consequences can cascade through the economy when regulators are asleep at the wheel. Today, there’s another looming economic risk: climate change. Once again, how much it harms economies will depend a lot on how financial regulators and central banks react. Climate change’s impact on economies isn’t always obvious. Mark Carney, the former governor of the Bank of…

Read More