The lockdown measures needed to combat the pandemic — which the government intends to lift on a risk-adjusted basis in the coming months — are expected to result in GDP shrinking by 6.1% and a loss of at least 370,000 jobs, according to Reserve Bank estimates. The government’s R500bn rescue package won’t prevent a sharp contraction in the economy, said Moody’s Investors Service, which sees the economy shrinking 6.5% and the budget deficit widening to 13.5% in 2020.
Patel said that the new arrangements the government plans to put in place will be based on a phased-in return to work aimed at striking a balance between opening up the economy and the risk of a resurgence in infections.
The exact number of people going back to work will depend on how many firms reopen, final arrangements made for sectors such as education, and on the industrial classification framework that is still being developing for different sectors.
Areas reopened for business include parts of the agriculture, manufacturing and mining sectors, on a scaled-up basis. Agriculture will now include forestry, logging and related services, while the manufacturing sector will be allowed to scale up activity to accommodate 20% of employment.
In some cases such as automotive and components manufacturing, as well as cement, construction and hardware, activity will be scaled up to cover 50% of employment.
In the retail and wholesale trade sectors an expanded list of items will be for sale, including stationery and educational books as well as personal ICT equipment such as computers and cellphones. The sale of hot cooked food, for home delivery between 9am and 8pm, will also be permitted.
The proposals are being put to various sectors on Saturday — after discussions held with business organisations, firms and trade unions — ahead of the gazetting of new regulations in the coming week, said Patel.
In deciding to what extent industries will be reopened, Patel said the state considered factors including the risk of transmission posed by a sector or workplace, the expected effect on the sector of a continued full lockdown, and the contribution and economic linkages a sector makes to the broader economy. This took into account a sector’s contribution to GDP, the number of jobs, export earnings, and the supply chain linkages to other parts of the economy.
The phased return to work approach will allow for increased levels of workplace testing, notably in large companies, which could then be fed into the state’s national data system and provide more information about the infection Patel said.
It will also allow firms to prepare themselves for operations during the pandemic and prepare their workplaces and employees for operating under health and social distancing restrictions.
“If we move too fast we risk a rapid rise in infection ... and we will find ourselves with many ill people, many more deaths and we will have to return to level 5, which is in itself detrimental to the economy in the long term, ” said Patel. “If we move too slow, we prolong the economic downturn.”
Assessing how to lift the lockdown has been “a difficult process and a hard balancing act” he said. SA needed to “strike a careful balance” between getting to work as quickly as possible and containing the spread of the virus to save lives, he said.
donnellyl@businesslive.co.za
Easing of lockdown will open the gates to about 1.5-million workers
More than 1.5-million people will be able to return to work once SA relaxes one of the world’s most stringent lockdowns to limit the spread of the coronavirus, according to a briefing by trade & industry minister Ebrahim Patel on Saturday.
The move into stage 4 is slated for May 1 and will equate to the return of a large number of employees who have been unable to do their jobs during phase 5, which imposed a near complete stop to economic activity and had economists rushing to downgrade their already gloomy predictions for 2020.
The latest Covid-19 coronavirus coverage
The lockdown measures needed to combat the pandemic — which the government intends to lift on a risk-adjusted basis in the coming months — are expected to result in GDP shrinking by 6.1% and a loss of at least 370,000 jobs, according to Reserve Bank estimates. The government’s R500bn rescue package won’t prevent a sharp contraction in the economy, said Moody’s Investors Service, which sees the economy shrinking 6.5% and the budget deficit widening to 13.5% in 2020.
Patel said that the new arrangements the government plans to put in place will be based on a phased-in return to work aimed at striking a balance between opening up the economy and the risk of a resurgence in infections.
The exact number of people going back to work will depend on how many firms reopen, final arrangements made for sectors such as education, and on the industrial classification framework that is still being developing for different sectors.
Areas reopened for business include parts of the agriculture, manufacturing and mining sectors, on a scaled-up basis. Agriculture will now include forestry, logging and related services, while the manufacturing sector will be allowed to scale up activity to accommodate 20% of employment.
In some cases such as automotive and components manufacturing, as well as cement, construction and hardware, activity will be scaled up to cover 50% of employment.
In the retail and wholesale trade sectors an expanded list of items will be for sale, including stationery and educational books as well as personal ICT equipment such as computers and cellphones. The sale of hot cooked food, for home delivery between 9am and 8pm, will also be permitted.
The proposals are being put to various sectors on Saturday — after discussions held with business organisations, firms and trade unions — ahead of the gazetting of new regulations in the coming week, said Patel.
In deciding to what extent industries will be reopened, Patel said the state considered factors including the risk of transmission posed by a sector or workplace, the expected effect on the sector of a continued full lockdown, and the contribution and economic linkages a sector makes to the broader economy. This took into account a sector’s contribution to GDP, the number of jobs, export earnings, and the supply chain linkages to other parts of the economy.
The phased return to work approach will allow for increased levels of workplace testing, notably in large companies, which could then be fed into the state’s national data system and provide more information about the infection Patel said.
It will also allow firms to prepare themselves for operations during the pandemic and prepare their workplaces and employees for operating under health and social distancing restrictions.
“If we move too fast we risk a rapid rise in infection ... and we will find ourselves with many ill people, many more deaths and we will have to return to level 5, which is in itself detrimental to the economy in the long term, ” said Patel. “If we move too slow, we prolong the economic downturn.”
Assessing how to lift the lockdown has been “a difficult process and a hard balancing act” he said. SA needed to “strike a careful balance” between getting to work as quickly as possible and containing the spread of the virus to save lives, he said.
donnellyl@businesslive.co.za
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