Pressure Builds on SA to End Hard Virus Lockdown

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  • SADC feels the chill as South Africa sneezes 
  • Virus pandemic adds to SADC growth woes

By Sharon Kavhu

 

Pretoria-South African President Cyril Ramaphosa is under immense pressure to end the country’s lockdown which is running into its eighth week amid mounting fears that the shutdown has placed Africa’s biggest economy in an irreversible path to a deeper recession.

 

Growth in South Africa, the largest economy on the continent and the most industrialised, will contract by about 6.1 percent this year. As the national lockdown becomes protracted, economists worry that prospects of a near-term recovery in growth are diminishing. The consequences are not only dire for South Africa, but for Botswana, Lesotho, Namibia and Swaziland whose economies are closely aligned to the continental powerhouse through monetary policy mechanism, trade and revenue sharing. 

 

Growth woes from South Africa would ripple across the region worsening the plight of countries such as Zimbabwe, with an economy that was already fragile. For instance, Namibia’s economy will contract by 6.9%, the biggest decline since the country gained black majority rule in 1991. Ramaphosa, who is also chairman of the African Union admitted the need to re-open the economy further, and will probably consider easing some provinces in the country from level 4 lockdown to level from June 1. This is despite the coronavirus infections continuing to increase.

 

The government strategy on handling the virus would worsen the unemployment rate and poverty, said Andrew Lapping, chief investment officer at Cape Town-based Allan Gray, a fund manager that manages about 40 billion rand investments.

 

“Every week the lockdown continues, the economic cost compounds,’’ Lapping said. “We can no longer blame the virus when the vast majority of the job losses and suffering is the consequences of a strategy that has not fully accounted for the human cost of the lockdown on the economy.”

 

While Ramaphosa’s government is rolling out a 500 billion rand plan to stimulate economic growth, investors see the lockdown worsening the investment climate and the plight of the poor. Businesses’ rallying cry is now for the lockdown to be lifted and for commerce to flow, freely. Ramaphosa admitted government measures are aimed at containing the spread, but not ending the virus. With no indication of when a vaccine would be found, businesses argue that the economic cost is bigger than the toll from the virus infection.

 

“If the disease can not be stopped, and a vaccine is not discovered, then almost no lives will be safe from Covid-19, but we will have destroyed the economy, increased government debt by 500 billion rand and lost a great number of lives through higher mortality not related to Covid-19,” Lapping said. “Many people have no savings and have lost their livelihood during the lockdown. Hunger is an immediate reality for many households and this has long term effects as malnourished children will be disadvantaged for the remainder of their lives due to stunting.’’

 

Business for South Africa, the country’s biggest lobby group, said economic restrictions must be swiftly eased. 

 

“Strict economic lockdown imperils the livelihood of millions of South Africans,’’ Martin Kingston from Business for South Africa said. “Widespread hunger, despair and economic desperation are already a reality for millions. The lockdown restrictions have caused significant harm, particularly to small businesses, piece workers and the self-employed who have very few assets and savings that allow them to survive for any extended period of time. Likewise, whole sectors of the economy have seen revenue collapse with devastating consequences for workers, communities and investors alike.’’

 

What has stoked the ire of many South Africans is that some of the strict rules attached to the lockdown such as ban on the sale of cigarettes is now fuelling a huge underground economy and worsening revenue losses for businesses. Government has also restricted sale of alcohol and put out a list on a limited range of clothing items that could be sold during the lockdown. 

 

South Africa entered a national lockdown on the 27th of March and the rest of the region soon followed. Across the continent, Ghana is one country that exited the national lockdown and citizens were urged to follow strict health protocols. While the lockdown has also been eased in Namibia, Zimbabwe and other countries in the region, some restrictions still remains in place. 

 

“If we lift the lockdown too abruptly and too quickly, we risk a rapid and unmanageable surge in infections,’’ Ramaphosa said on Wednesday. We will therefore continue to proceed cautiously, informed by the best available evidence and guide by the advice of local and international experts. Our goal is to steadily increase economic activity while putting measures in place to reduce the transmission of the virus and provide adequate care for those who become infected and need treatment. Although the lockdown has slowed down the rate of transmission, the coronavirus is very much still present – and will be present among us for a long time to come.”

This sentiment was also shared by the World health Organization (WHO) as it indicated that the global death toll is now about to reach 300,000 and there is need to learn to manage and live with the virus as predictions indicate that it is likely to be with us for long.

 

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