- South Africa faces the economic hardship of terminating over four million jobs and contract by 16% in 2020.
- Lockdown restrictions were marginally eased on May 1, with key industries only operating at partial capacity.
- Companies have been advised to consider cutting dividends to conserve resources.
South Africa has been urged to end the coronavirus lockdown within weeks or face the economic hardship of terminating over four million jobs and contract by 16% this year, according to the analysis of the nation’s main business group.
Head of the economic workgroup at Business for South Africa, Martin Kingston, explained that the country lacks the financial resources to withstand the extended closure of companies with safety protocols put in place for commerce to restart immediately.
“We are not like the European Union, or the U.S. or China, Japan” and can’t withstand a drawn-out process, Kingston said. “We are talking about weeks, not months, to get through the levels. That is what we aspire to as a business.”
On March 27, President Cyril Ramaphosa announced lockdown order that compelled most businesses to shut down operations in a bid to curb the spread of the coronavirus. Restrictions were marginally eased on May 1, with key industries only operating at partial capacity. (Read story)
While the authorities haven’t indicated when they might further loosen controls, Salim Abdool Karim, an epidemiologist and chairman of a ministerial advisory group on the outbreak, told reporters on Wednesday that keeping the economy almost completely closed beyond May 1 would have served little purpose.
Government departments will need to align their views and decide how best to steer the economy, Kingston said, adding that business is eager to cooperate and help raise funding. Sacrifices will need to be made, he said in reference to an ongoing debate on whether to try and keep the bankrupt national airline, South African Airways, afloat.
Businesses will also have to tighten their belts and may need to narrow the gap between management and worker salaries, and consider reducing dividend payments to conserve resources, he said.
“We are going to have to embark on a steeper trajectory of inclusive and sustainable growth,” he said. “We can’t expect that people are going to enjoy the lifestyles they’ve had until now in a post COVID-19 era.”
63 total views, 3 views today