Friday, 24 April 2020

Reopening the economy: Obstacles, opportunities and risks

  • Year: 2020
  • Author(s): Neva Makgetla (TIPS)

Both South Africa and the world face an economic crash as a result of the COVID-19 pandemic. The downturn, which threatens to rival the Great Depression, results from the need to take extraordinary efforts to limit the contagion. Internationally, the consequence has been plummeting demand, especially in the global North, with falling export prices except for gold, as well as disrupted supply chains for most producers. In South Africa, the lockdown has brought a sharp decline in domestic production, combined with a rapid increase in joblessness, falling household and business incomes, and shrinking government revenues.

This brief looks at the impacts of the pandemic on the global economy, and especially South Africa’s main trading partners. Reopening the South African economy will take time and provide opportunities unevenly by industry and region. The regulation of economic activity will depend in part on the extent of infections, in part on the relative priority given to different value chains, and in part on the risk associated with the production of specific goods and services. But the recovery will also be affected by economic factors, in part rooted in the shutdown period and in part reflecting long-standing economic challenges nationally and internationally. The brief analyses the blockages to reopening the economy, which in turn lays the basis for more effective and strategic measures. 

Download a copy or read the policy brief online.

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