May 23, 2020
DEBT RELIEF/FORGIVENESS: A STEP TOWARDS FINANCIAL HEALTH AMIDST COVID-19 PANDEMIC.
BY Latifat Moradeyo (Associate)
The outbreak of COVID-19 pandemic has exposed the world to an economic upheaval. Declared a pandemic by the World Health Organization (WHO) on 11 March 2020,[1] COVID-19 has become a global emergency, given its impact on the entire world population and the economy. It has no doubt resulted in closure of countries borders, shut down of businesses and self– quarantine globally.
Economic impacts of the COVID-19 pandemic became more visible in the world economy by the 20th of February, 2020 with the stock market crash.On 14 April 2020, the International Monetary Fund (IMF) reported that all G7 nations had entered or were entering into what was called “deep recession” alongside most of the western world with significant slowdown of growth across developing and emerging economies[2]. The IMF has stated that the economic decline is “far worse” than that of the Great Recession in 2009[3].
It is worthy of note that the pandemic has so far affected companies particularly on the supply and demand sides[4]. On the supply side, companies experienced a reduction in the supply of labour, as workers were unwell or needed to look after their children or other dependents and in many cases, there was outright downsizing due to paucity of income to meet such commitments.The recession has seen unusually high and rapid increase in unemployment rates in many countries. For instance, some of the world biggest airlines including Virgin Australia, Air Mauritius and four subsidiaries of Norwegian airline filed for bankruptcy. Pursuant to this, an estimated 1, 571 pilots and 3, 134 cabin crew employed by these companies and their subsidiaries stand the risk of losing their jobs.
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