Covid-19: 60,000 Eastern Cape jobs at risk

At least 59,000 jobs could be lost in the Eastern Cape as a result of the Covid-19 pandemic.

About 14,000 of these positions could be shed in the next three months alone.

This is the grim outlook contained in a report from premier Oscar Mabuyane’s office, which has brought into focus the steep economic cliff facing the province and country.  

The report, seen by DispatchLIVE, was presented to the Covid-19 provincial command council at the weekend.

More than 400 businesses indicated they expected to shed a combined 14,000 jobs in the next three months.

The report adds another 45,000 jobs are “at risk” in the province's tourism sector, though no timelines are provided.

It says 50,000 tourism businesses may shut down nationally, which would affect 550,000 jobs across SA.

The 400 companies say they have been hit hard by the pandemic and lockdown, with supply chains and business continuity disrupted.

The  report includes an analysis of the province's economy and recovery plans, and of how the virus is likely to affect provincial departments and labour.

By Sunday, companies in the Eastern Cape had received R776m in Covid-19 temporary employer/employee relief scheme (TERS) benefits from the Unemployment Insurance Fund.

But a significant number of applications for funding had been rejected.

“Under rejections, the Eastern Cape has 5,066 employers who are affected ... This affects 31,735 employees, amounting to R130,415,911. The main reason for rejections is non-registration with UIF.”

Eastern Cape Chamber of Business secretary Dr Andile Nontso said his organisation had informed the  government that 1,400 SMMEs would close down in the province, resulting in the loss of 7,000 jobs in this sector alone.

Border-Kei Chamber of Business executive director Les Holbrook said the actual number of job losses would be clearer by June 8, a week after most people return to work.

Holbrook said: “There is inevitably going to be a balance between guesstimating and research data.

“The chamber has surveyed  members and returned empirical data and facts.

“What we are saying is that presently the data supplied carries with it certain disclaimers. But it is true some sectors, such as tourism, are affected more than others.”

Inevitably there would be a spike in job losses as a result of the lockdown.

“There are businesses and enterprises that have not survived. The actual number is unknown, but the chamber is trying to establish those numbers.”

Nontso said none of the chamber's members had received funds from the government yet. 

“Our salons, hawkers and those in agriculture and manufacturing are going to close because they don’t have any support.

“If the government is going to order me to close and I was making R20,000 a day, I must be given that amount, not R60,000 after two months.

“We thought there was a plan that would say, ‘Close your business, we will give you the money you were making’.”

The provincial government’s response to the crisis is being co-ordinated by an economic commission led by Mabuyane.

According to the report, 3,406 sustainable jobs would be created by the provincial government’s nine farming schemes in Ncorha, Qamata, Shiloh and Bilatye in the Chris Hani district; in Keiskammahoek, Thyefu and Zanyokwe in Amathole; and Port St Johns and Lambasi in OR Tambo.

The report said the provincial government would transfer R100m to the Land Bank “to assist distressed farmers”.

Bhisho is also collaborating with microfinancer Ubank to set up a provincial SMME fund “in response to Covid-19 pandemic and beyond”.

The report said a memorandum of agreement was being finalised between the provincial government and Ubank, and the two parties would each contribute R600m over three years.

The agreement would include the following:

• Encouraging private- and public-sector institutions to support Ubank;

• Promoting Ubank product offerings in the Eastern Cape; and

• Setting up a dedicated desk to be “be resourced and capacitated” to deliver most of the collaborative functions, and conduct joint marketing activities.

In return, Ubank would provide financial assistance to qualifying SMMEs in the form of loans and capital.

The 126-page report outlines the Eastern Cape’s Covid-19 health response and findings, some of which are surprising.

Contrary to national and international trends of Covid-19 being more prevalent among the elderly, in the Eastern Cape most cases have been recorded among those in their mid-30s.

It is not clear why individuals in this group are contracting the disease.

Provincial health adviser Dr Bevan Goqwana said he was not present at the command council meeting on Sunday, but he was aware that the virus seemed more common among the “young” and “busy” people  in the workforce, particularly the police.

“I think we should concentrate more on the police. It is now becoming clearer.

“I had suggested that anyone 55 and older stay at home, so it’s become obvious the youth are roaming outside and it’s the age group you’re referring to.

“So it stands to reason it will be common among that age group because they are always outside.”

The report notes that more women (55%) than men (45%) had tested positive for the virus in the province by May 23.

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