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Most restrictions lifted except for international travel; curfew remains in place
Should Ramaphosa establish a Growth Commission? [GCIS]
The national lockdown has seen a drastic reduction in economic activity and during the current Level 3 lockdown many citizens were ignoring the rules and there has been an increase in illicit trading in tobacco and alcohol, both of which are banned currently, but will be lifted under Level 2.
South Africa has the world’s fifth highest number of confirmed Covid-19 cases with 583, 653 cases as at August 15. The number of confirmed Covid-19 daily cases dropped to 2 511 on August 11 from a peak of 13 944 on July 24. The seven-day average is also easing from a peak of 12, 584 in the seven days ending July 19 to 4, 309 in the seven days ending August 15.
The government announced a R500 billion stimulus package in April to help alleviate some of the pain, but the key part of that, namely the R200 billion bank loan guarantee fund, has allocated less than 7% of that amount in the past three months. Other income support measures have had similar operational shortfalls, while private sector support initiatives have seen their funds already exhausted in April.
According to a survey by the National Employers’ Association of South Africa (NEASA), nearly 60% of employers across the country still have not received their June Temporary Employer-Employee Relief Scheme (TERS) money. Of the 40% of employers who received payment for June, only 64% were paid in full. NEASA claims that 28% of employers still have not received their May benefits and 12% of employers still have not received their April benefits.
The result of the lockdown restrictions and the lack of adequate income support measures is evident in the monthly data released so far for the second quarter. Data published by Statistics South Africa show that manufacturing production declined by an unprecedented 76.2% quarter-on-quarter (q/q) at a seasonally adjusted annualized rate (saar), while mining production also contracted by a similar margin or 76.3% q/q saar. Restrictions on visits to restaurants, purchases of cooked meals, the consumption of alcohol and tobacco, etc. also meant that households spent less on food over the quarter with a 71.6% q/q saar decrease.
Many businesses in the beer industry have still not recovered from the first nine-week alcohol ban in place from March 27 to May 31, including 8, 000 licensed taverns and 30% of craft breweries that were bankrupted and have ceased operating. The second ban, that came into effect on July 13, forced an additional 15% craft breweries and thousands more taverns to shut down permanently.
The collapse in economic activity is also evident in the plunge in the number of full containers imported, which fell by 45.8% year-on-year (y/y) in July. In no month this year so far has there been a y/y increase in this measure.
That is why John Steenhuisen, the leader of the official opposition party, the Democratic Alliance, was so scathing in his response to the lockdown announcement.
“President Ramaphosa’s announcement tonight that the lockdown will continue at Level 2 is nothing but a capitulation to the real power in the African National Congress (ANC), who desperately want to cling to the ‘new normal’ they have created for South Africa these past five months. The lockdown, along with the State of Disaster that was again extended for 30 days today, only serves to place power and control in a few hands and bypasses government’s legislative arm entirely. Whether they call it level one, two, three or six, it doesn’t matter. It should not be there at all,” Steenhuisen said.
“The ANC government has caused devastation on an unimaginable scale to the lives of ordinary South Africans, while they themselves have not experienced a single day without income. Throughout the lockdown crisis, they could not have been more out of touch with the people whose lives they destroyed. The only thing the lockdown achieved was the devastation of our economy and the loss of millions of jobs. And that is what President Ramaphosa and his government must take responsibility for.”
“And that is the big elephant in the room of tonight’s address: the brazen looting of Covid funds by ANC cadres and their family members. South Africans won’t be distracted by announcements of lockdown levels. They want to know what the president is doing about this pandemic of ANC corruption. They want to see charges, court dates and sentences,” he added.
The South African Council of Churches (SACC) issued a statement on August 7 condemning the “moral depravity” of unethical people benefitting unjustly from the pandemic emergency funds. The SACC had warned about this when the emergency funds were first announced in April, but their warning was ignored. The organisations which joined with the SACC are the Ahmed Kathrada Foundation, the Desmond & Leah Tutu Legacy Foundation, the Nelson Mandela Foundation, the Foundation for Human Rights, and the Council for the Advancement of South African Constitution (CASAC).
They called for the government to ensure that all public representatives and political party executive committee members, and their immediate families, as well as all civil servants, not be allowed to conduct business with the state.
Ramaphosa said earlier epidemiological models had to be revised downward due to the country’s better than expected response.
“It is now clear that had we not acted as swiftly and decisively as we did – and had we not taken the threat as seriously as we did – far more lives would have been lost,” he noted.
The move to lockdown level 2 means that restrictions will be eased in the following areas:
At this stage there is no clear guidance on when scholars can return to school as so far only grade 7 and grade 12 scholars have been allowed to return to public schools, while there is no restriction on the better-resourced private schools.
Ramaphosa said that citizens should not ease their vigilance when it came to personal hygiene and preventative measures, such as wearing masks, as the virus was still circulating in communities.
Helmo Preuss in Makhanda, South Africa for The BRICS Post
