Sustainable Growth

Displaying items by tag: Covid 19

This paper:

  1. Reviews the socio-economic mandates of the major state-owned companies (SOCs) as reflected in official documents, sometimes only implicitly;
  2. Provides case studies of four leading SOCs in terms of their socio-economic and financial mandates over the past decade or so; and
  3. The actual and potential impact of the COVID-19 pandemic on the four case studies.

The study reviews the SOC and development finance institute landscape in terms of the functions and size of the various entities. It then looks in more detail at Eskom, SANRAL, Transnet and Denel.

It concludes with a discussion of some common shortcomings identified in the analysis of the four SOCs.

  • Year 2020
  • Organisation TIPS
  • Countries and Regions South Africa
Published in Trade and Industry

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.

Since the pandemic and the economy have stabilised, this will be the last Tracker. TIPS will continue to publish periodic in-depth analyses of developments and debates around recovery and reconstruction. Our quarterly Real Economy Bulletin will also include a section on the impact of the pandemic on the economy.

KEY FINDINGS FOR THE WEEK

On the pandemic

  • The rate of transmission of COVID-19 has continued on a secular upward trend, but the increase has been both slow and unpredictable. The long holiday weekend around Heritage Day on 24 September appears to have fuelled an uptick a week later.
  • The rate of transmission depends largely on the extent to which public health authorities are able to convince people to wear masks and avoid social gatherings, whether in homes or businesses.
  • Overall, excess deaths during the COVID-19 pandemic seem likely to be the largest single source of natural deaths in South Africa this year. For comparison, COVID-19 is now estimated as the 12th largest cause of death globally, but ranks first in New York, Brazil and Peru, second in the UK, and third in Sweden.

On the economy

  • In a pattern seen worldwide, the recovery has taken a “swoosh” shape, with a relatively sharp rebound in April and May fading into a more gradual improvement over the past four months. Breakdowns in Eskom plants remain a binding constraint, with a downturn in electricity sales in September.
  • As usual with economic and natural disasters, damage from the pandemic is falling disproportionately on the poorest communities and households. Employment data for the second quarter show that job losses were highest for lower-skilled, lower-income and informal workers. These groups will also be hard hit by the termination of the COVID-19 special grant and the supplement to other social grants, currently due to end on 15 October.

Download the Tracker or read online

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.

Over the next few months, the Tracker will explore the challenges facing different industries, looking in this issue at autos and music.

KEY FINDINGS FOR THE WEEK

On the pandemic

  • Since 18 August, when the country moved to Level 2 of the lockdown, the number of cases has plateaued at over 1 500 new cases daily. For comparison, reported infections peaked at over 12 000 a day in mid-July. The current level of reported daily diagnoses was last seen in early June. The rate of transmission remains far lower than three months ago, but has climbed by 75% over the past month, leading to a modest increase in new cases in the past week.
  • With new cases falling until last week, the government further relaxed restrictions from 21 September, mostly permitting much larger gatherings and shortening the curfew. Unless stronger behavioural changes bring transmission again under control, however, cases will start accelerating in the coming weeks.
  • The results of reopening without adequate protection can be seen Europe and the US. In some areas, new cases now exceed April levels, bringing renewed restrictions on businesses, especially bars and personal services, and on the size of gatherings. The evidence indicates that higher transmission resulted largely from reopened nightlife and universities combined with increased tourism. In the US, initial studies suggest that around a fifth of cases are traceable to bars alone.

On the economy

  • The GDP figures for the second quarter of 2020, released on 8 September, revealed the extraordinary impact of the pandemic. Evaluation of the (limited) data on monthly trends shows that the decline took place exclusively during the full lockdown in April. It was followed by a strong although incomplete rebound in May. Since then recovery has slowed, despite the elimination of almost all legal restrictions with the move to Level 2.
  • The pandemic has ushered in a new world for state-owned companies, which have found they can no longer easily obtain subsidies from the state when they run substantial losses, especially when they have no core socio-economic mandate. Among others, SAA, Denel and the SABC are in a financial quandary with no obvious resolution, and Eskom has had to accept that recovery will require faster erosion of its monopoly on the national grid.
  • Efforts to develop recovery plans intensified in the past month as the reopening of the economy has returned attention to more fundamental constraints on growth. The discourse has generally centred on supporting existing formal businesses, however, without complementary programmes to promote more inclusive growth. The auto and music industries point to the tough choices required in light of the economic havoc caused by the pandemic both nationally and globally.

Download the Tracker or read online

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.

Over the next few months, the Tracker will explore the challenges facing different industries, starting in this issue with steel and tourism.

KEY FINDINGS FOR THE WEEK

On the pandemic

  • The number of new diagnoses of COVID-19, which started to decline rapidly in mid-July, levelled out at an average of just over 2 000 a day in the week to 6 September. In contrast to the move to Levels 4
    and 3, however, three weeks after Level 2 started on 18 August reported infections had not risen sharply.
  • A review of international data shows that countries with higher reported death rates from COVID-19 can also expect a sharper economic decline. Countries with lower death rates, in contrast, generally also had better economic results. The lowest reported death rates emerged in two kinds of countries: in states that controlled the spread of the pandemic through strong public health measures; and in low-income economies characterised by limited international air links, largely rural populations, and low testing rates

On the economy

  • The move to Level 2 brought an initial increase in economic activity. Overall, the available indicators suggest that economic activity has returned to around 10% below pre-pandemic levels. The Western Cape, however, continues to lag behind.
  • The recovery has run up against loadshedding by Eskom. Yet government expects to finalise its emergency acquisition of 2 000 MW of new power from private suppliers only in mid-2022.
  • Case studies of steel and tourism underscore that economic recovery will require more than broad government measures to control the pandemic, stimulate demand and fix the electricity supply. In many industries, new business models are required to survive, and that imposes touch choices around write-offs of assets and employment. The particularly stark challenges facing tourism help explain the relatively slow recovery of the Western Cape economy.

Download the Tracker or read online

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.

KEY FINDINGS FOR THE WEEK

On the pandemic

  • The number of reported new cases fell to an average of 3 350 a day in the week to 23 August, from a peak of over 12 000 in mid-July. In response, government relaxed restrictions to Level 2 from Tuesday, 18 August.
  • The government was clearly concerned that removing legal restrictions could lead the public and businesses to weaken their efforts to limit transmission, especially physical distancing and masking. Despite the progress from mid-July, the number of reported new cases in the week to 23 August was still three times as high as when Level 3 started on 31 May. If people engage in more risky behaviour, cases will start to surge again in two to three weeks.
  • The move to Level 2 underscored that, as long as the pandemic is not fully under control, some industries cannot be both profitable and safe unless they transform their business models. This applies above all to public in-doors entertainment, restaurants and bars; large malls; most personal services such as gyms and hair salons; public transport; and tourism, especially from overseas.

On the economy

  • The available evidence indicates that the economic recovery remains slow.
  • Big companies have begun to announce their financial results for the period to June, and most are not pretty. There are, however, big differences depending on the industry and the state of the business before the lockdown. State-owned companies that have relied on government bailouts over the past decade now face the real risk of liquidation.
  • Following the public outcry over corruption around the pandemic response, the government has introduced measures to capacitate state institutions to initiate investigations and prosecutions. In light of the open pushback from some politicians, the success of the new initiatives will depend on support from civil society, and especially the media and advocacy groups, as well as on the ability of the legal system to move far more quickly and decisively.

Download the Tracker or read online

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.

KEY FINDINGS FOR THE WEEK

On the pandemic

  • South Africa appears to have succeeded in cutting the transmission of COVID-19 sharply over the past month, although reported new cases per 100 000 are still far higher than in early June. Known active cases declined 45% from their peak in mid-July through 9 August.
  • The reasons for the decline are not obvious. The critical factor has likely been the willingness of millions to wear masks and socially distance as far as possible, reinforced by government action to discourage high-risk activities in mid-July.
  • Despite the improvement, six out of nine provinces still reported more than 10 new cases per 100 000 residents as of 8 August. According to recommendations by the Harvard Global Health Institute and the Safra Centre for Ethics, that means they should maintain strict limits on social and recreational gatherings. An OECD study found that if South Africa permits another peak in infections this year, it will shave 2% off the GDP forecast for 2020 and 2021.

On the economy

  • The available data suggest that economic growth is still recovering slowly.
  • The pandemic has had a particularly harsh impact on women in South Africa, as internationally. They are more likely to work in jobs that directly serve the public, where the risks of both infection and job losses are highest. They are also less likely to have paid work at all, and so benefit less from relief efforts tied to employment and income. And they face increased domestic violence during the lockdown. The increase in social grants goes only a small way to offsetting these disadvantages.
  • The social and political stresses resulting from the long-running pandemic have begun to emerge in rising protests as well as the corrosive discourse on corruption in procurement. Nonetheless, proposals for recovery from economists and business organisations continue to focus on long-run demands rather than ways to cushion the immediate economic impacts of the pandemic. Opportunities include setting up systems to limit workplace outbreaks; developing a just transition for industries that cannot open safely in the short run (notably entertainment venues, tourism and liquor stores) while identifying new opportunities; expanding public employment and other programmes to relieve the devastation wrought on poor communities; and finding more progressive ways to fund state programmes.

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Sunday, 02 August 2020

Towards a reconstruction programme

The COVID-19 pandemic has dealt a body blow to the global economy, and South Africa is no exception. Recovery will not succeed, however, unless it addresses the long-standing blockages to inclusive growth. That in turn requires both immediate efforts, to minimise the economic impacts of the pandemic even while it still rages, and longer-run strategies to diversify the economy away from mining and to ensure greater equality in education, workplaces, and access to assets. These kinds of strategies inevitably require innovation and consequently entail risks, as well as running into resistance from the beneficiaries of the status quo. But South Africa will not achieve either higher growth or social cohesion unless it does more to promote a more inclusive, diversified and equitable economy.

This policy brief reviews the short- and long-run impacts of the pandemic on the economy, followed by proposals for moderating these impacts while laying the foundations for faster, more equitable and more inclusive growth after the pandemic ends.

Download a copy or read Policy Brief online.

  • Year 2020
  • Author(s) Neva Makgetla and Saul Levin (TIPS)
Published in Policy Briefs

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.

KEY FINDINGS FOR THE WEEK

On the pandemic

  • The number of diagnosed new cases levelled out in Gauteng and Eastern Cape in the past 10 days and continued to decline gradually in the Western Cape. As a result, the number of active cases reported declined in the past week for the first time, despite escalating growth in KwaZulu-Natal and the Free State.
  • The reasons for the decline in reported active cases remains unclear, and it may not be sustained. In any case, unless the number of cases starts to fall more rapidly, South Africa will be living with a very high rate of cases per person by international standards for some time. That in turn makes it harder to control transmission generally. Moreover, it means individuals face higher risks than a month ago, especially in Gauteng, the Western Cape, the Eastern Cape and KwaZulu-Natal.
  • The Medical Research Council has found that the total deaths from natural causes has climbed by over 12 000 above the expected number of deaths at this time of year, even after taking into account reported deaths attributed to COVID-19. This pattern reflects a common experience internationally. It typically arises because more people have died at home during the pandemic either without a COVID-19 diagnosis or because they avoided getting treatment for some other ailment due to fear of contagion.

On the economy

  • As in other countries, the sharp increases in reported new cases and lower employment and incomes appear to be weighing down the economic recovery. The available indicators point to a slight fall in household consumption over the past two weeks. In the longer run, the South African Reserve Bank now expects a 7,2% downturn for the year.
  • From March to May, consumer prices in South Africa dropped by 1%, and inflation from May 2019 to May 2020 fell to 2%, lower than any time since 2005. But food prices rose 4,5% from March to May, offset mostly by the sharp fall in global oil prices. As a result, the lower-income group, which spends more on food and less on petrol, experienced higher inflation than the richest 10% of households.
  • International experience continues to demonstrate that, as in South Africa, economic recovery can be heavily set back by ending restrictions on risky activities before the virus is under control. In this context, the often-cited trade-off between lives and livelihoods turns out to be misleading. The real challenge is to cushion low-income households as far as possible from the economic slowdown.  

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As South Africa responds to COVID-19 and aims to stimulate the economy and job creation post the lockdown through an infrastructure-led package, an opportunity should not be missed to address many of the water and sanitation challenges in the country. This is much needed and would provide multiple benefits, not only for the economy but also for the poor communities that need the infrastructure and services as well as municipalities that require strengthening of their water and wastewater infrastructure. This policy brief looks at the benefits of including water and sanitation in the country’s stimulus package and considers possible avenues to do so.

Download a copy of the Policy Brief or read online.

This policy brief is a summary of a Working Paper available here: A case for water and sanitation in South Africa's post-lockdown economic recovery stimulus package

 

  • Year 2020
  • Author(s) Shakespear Mudombi (TPS) and Gaylor Montmasson-Clair (TIPS)
Published in Policy Briefs

As South Africa responds to COVID-19 as well as aims to stimulate the economy and job creation post the lockdown through an infrastructure-led package, an opportunity should not be missed to address many of the water and sanitation challenges in the country. This is much needed and would provide multiple benefits not only to the economy but also the poor communities that need the infrastructure and services, as well as municipalities that require strengthening of their water and wastewater infrastructure. This working paper looks at the benefits of including water and sanitation in the country’s stimulus package and considers possible avenues to do so.

For a summary version of the working paper see Policy Brief: A case for water and sanitation in South Africa's post-lockdown economic recovery stimulus package

  • Year 2020
  • Organisation TIPS
  • Author(s) Gaylor Montmasson-Clair (TIPS); Shakespear Mudombi (TIPS)
  • Countries and Regions South Africa
Published in Green Economy

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.

KEY FINDINGS FOR THE WEEK

On the pandemic

  • Daily growth in reported new cases has exceeded 7% a day in Gauteng, KwaZulu-Natal and the North West, and was at 5% in the Eastern Cape. Total reported cases more than doubled over the past two weeks to reach 264 000, while the seven-day rolling average of new cases climbed from 5 000 on 26 June to 11 000 on 12 July. For the week to 11 July, South Africa reported more new cases per million people than the United States or Brazil, which have been famously unable to control the spread of COVID-19.
  • Newly diagnosed cases have essentially plateaued in the Western Cape since 20 June at around 1 200 a day. As a result, the Western Cape’s share of new cases reported in South Africa fell from half a month ago to a sixth in the past week.
  • The divergent regional trends raised the question of how to understand the factors driving infection rates. The much-heralded “peak” is, after all, only visible when the number of new cases starts to fall. In contrast to seasonal flu or diseases like measles, for which preventative measures exist, the only way to bring down the number of cases is behavioural change on a mass scale. Yet the government reimposed limited restrictions on especially risky activities only on 12 July, six weeks after the growth in new cases began to escalate.

On the economy

  • Looser restrictions on business contributed to the rapid spread of COVID-19 but, after a spurt in economic activity, the available indicators suggest that the recovery remains very slow. The challenges appear primarily in suppressed demand as escalating risks of infection in the metros, South Africa’s economic drivers, keep high-income consumers largely at home; most households have lost income; and export demand remains largely flat, with most commodity prices still lower than before the pandemic.
  • In the past week, both the ANC and Business for South Africa (B4SA) published proposals on how to boost the recovery. They share some important themes, notably around the need to mobilise both private and public financing for an infrastructure drive, the critical importance of fixing Eskom, and the need to avoid disruption to commercial agriculture. The main substantive disagreements emerge about how best to manage Broad-Based Black Economic Empowerment (BBBEE) and create a more dynamic and competitive economy.
  • Neither paper appears to have any new ideas on immediate measures to cushion the effects of the anticipated depression-level economic decline over the coming year. Income losses are likely to be severe for low-income households, small business and local governments.

Download the Tracker or read online

 

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.

KEY FINDINGS FOR THE WEEK

On the pandemic

  • In the past week, the contagion continued to spread rapidly in Gauteng and the Eastern Cape. The daily growth rate in Gauteng (using a rolling average of the previous seven days) was around 8,5% in the week to 28 June, down from 10% two weeks ago, and in the Eastern Cape it continued to fluctuate around 7%. In contrast, for KwaZulu-Natal the daily growth rate more than doubled over the past two weeks, escalating from 3% to 8%, and in the North West it was 11%. As noted last week, new cases reported in the Western Cape declined, but the figures there may been affected by new testing protocols.
  • The pandemic showed up the persistent inequalities in healthcare. The big metros have long had strong private health sectors as well as some excellent public-sector facilities linked largely to academic hospitals. In contrast, provinces like the Eastern Cape and the North West, which encompass largely historic labour-sending regions, have very limited private healthcare and weaker public systems. In this context, although the Eastern Cape has around a third as many cases per 100 000 residents as the Western Cape, it has begun to show severe strains.
  • On 29 June, according to News24, the acting mayor of Nelson Mandela Bay said it should consider returning to Level 4 restrictions. But government has effectively given up on its original
    risk-adjustment strategy, in the sense that it was not modifying restrictions on economic and social behaviour by municipality depending on the level of contagion. Yet it also did not move vigorously to improve communications and resourcing to empower people and institutions to prevent new infections. The crisis in the taxi industry underscored the lack of consistency in this regard, which seemed likely to accelerate the contagion.

On the economy

  • The available indicators were improved by monthly salary payments. The key economic centres of the Western Cape and Gauteng still showed a slower recovery than areas where the contagion was better controlled.
  • The IMF now expects the global economy to shrink by 5% in 2020, down from its 3% forecast in April. The international slowdown will constrain recovery in South Africa, which has an unusually open economy.
  • The supplementary budget announced this week will provide only a limited stimulus. Government borrowing will climb to almost 15% of the GDP almost exclusively because of the sharp decline in tax revenues due to the economic decline. In contrast, spending is expected to increase by only 1,1%, with increased healthcare, security and sanitation coming mostly out of the budgets for other functions.

Download a copy or read the Tracker online

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.

KEY FINDINGS FOR THE WEEK

On the pandemic

  • Transmission in Gauteng and the Eastern Cape continued on the accelerated path that kicked off with the move to Level 4 and escalated in Level 3. In Gauteng, the number of cases nearly doubled over the week to reach 137 per 100 000 residents; in the Eastern Cape, the figure topped 200; and in the Western Cape, it was over 700. In the other provinces, the incidence remained under 30. Differences in provincial testing strategies make comparisons increasingly difficult, however.
  • Government effectively reopened nearly all economic activity but continued to ban family gatherings except for funerals. It argued that relaxing restrictions on economic activity means individuals become responsible for limiting transmission. Government announced a new Ministerial Advisory Committee comprising religious and civil society representatives to promote behavioural change.
  • Government accelerated economic reopening largely in response to intense lobbying by businesses, often backed by the relevant Ministers (notably for mining, tourism and small enterprise). But it also reflects a conceptual contradiction: is COVID-19 like the flu, with an inevitable winter spike that equally predictably dissipates, or like HIV or TB, where behavioural changes can prevent transmission for long periods? If it is like flu, government should focus on bolstering the health system to deal with the surge in cases; if it is like HIV or TB, it should focus on changing behaviour plus tracing and isolating new cases.

On the economy

  • The economic bounce from Level 3 largely levelled out by mid-June. The banks now expect up to 10% impaired loans, compared to 6% in 2008/9. They have deferred payments for business and individuals on a large scale, but mostly only through June.
  • National Treasury will announce the supplementary budget on Wednesday, promising fundamental restructuring to address the COVID-19 depression. It expects the GDP to return to 2019 levels only around 2023.
  • Given South Africa’s unusual inequalities, the economic-policy response to the pandemic imposes tough choices. Hotspots have emerged almost exclusively in the metros’ dense townships and informal settlements, while workplace clusters mostly affect manual workers in mining, manufacturing, retail and public and private services. In contrast, higher-income professionals and managers can largely maintain physical distancing at work and while commuting, or even work from home. The state has effectively agreed to encourage businesses to reopen to boost incomes despite accelerating transmission, rather than extending the grants and UIF payments that enabled low-income households to avoid infections at work and in public transport.

Download a copy or read the Tracker online

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.

KEY FINDINGS FOR THE WEEK

On the pandemic

  • The move from Level 5 to Level 4 saw a sharp increase in cases, with Gauteng, the Eastern Cape and the North West now seeing exponential growth. In contrast, after an initial spike,
    KwaZulu-Natal has brought the rate of growth down sharply, and the contagion has also slowed in the Western Cape. The question remains whether government, business and civil society interventions to promote behavioural change could still rein in the pandemic and hold down the number of cases through to the end of the year.
  • In the past week, it became increasingly clear that while South Africa could increase the number of hospital beds, it would struggle to get enough health professionals to care for patients in them.
  • Lobbying by industries with a high risk of transmitting infections – especially personal services and entertainment – escalated. They contended it was unfair that they could not open up with the rest of the economy in Level 3. Yet the risk-adjusted approach explicitly differentiates between high-risk activities based on their perceived social benefits. To bolster their arguments, industry advocacy groups typically overstated their sector’s contribution to the GDP. For instance, the Tourism Business Council told Parliament last week that it contributed 9% of the GDP. According to Statistics South Africa, however, in 2017 the figure was under 3%.

On the economy

  • The available data show an initial rebound in the economy following the move to Level 3 flattened out last week. A survey of business by TIPS, BUSA and the Manufacturing Circle found that, when UIF funds run out next month, many companies anticipate retrenchments due to low demand.
  • The government plans a R500-billion stimulus package centred on guaranteed loans for small and medium business; the UIF COVID-19 TERS fund; and investment in infrastructure. As of 6 June, however, only around R500 million had been lent under the R200-billion loan guarantee scheme, which accounts for the lion’s share of the proposed stimulus package.
  • Virtually any effort to mobilise funding on the scale proposed for the stimulus package will affect the power as well as profits of different social groups, and consequently run into heated debates and intense lobbying. In the past week, debates swirled around the reprioritisation of the national budget, the use of UIF funding, the role of impact investments, and borrowing from the IMF and the World Bank. The government approached the IMF for a loan of US$4,2 billion, or R70 billion.

Download a copy or read the Tracker online

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.

KEY FINDINGS FOR THE WEEK

On the pandemic

  • The country moved into Level 3 this week, bringing a heightened risk of contagion as around five million people returned to work and church services reopened. From the past week, however, the pandemic accelerated in Gauteng and the Eastern Cape, with the growth in infections rising to almost 6% a day. At that rate, the number of cases will double every two weeks, and the move to Level 3 could aggravate the situation further.
  • The Cape Town health system has begun to show signs of strain, with high levels of infection among health workers leading to shortages and efforts to recruit from other provinces. Still, the rate of infection has slowed, apparently in large part due to improved tracing. If these efforts deteriorate again, however, or Level 3 means the contagion takes off again, further lockdowns may become unavoidable.
  • Despite the move to Level 3, there was still little sign of a government education campaign to empower people to manage the new risks they face at work, in public transport, in their families and in the newly reopened spaces for worship.

On the economy

  • Clusters continued to emerge in mining, retail, the public services and some manufacturing establishments. Outbreaks also appeared in a few residential institutions, which in other countries have had a disproportionate effect on mortality from COVID-19. But only the mining industry provided an overview of trends, making it difficult for the public at least to identify the main areas of risk.
  • The trade data show that South African exports declined by 55% in rand terms in April, although imports fell only 7%. For comparison, total US imports dropped 20% in April, while for China they fell 6%. The largest decline in South Africa’s exports emerged in the auto industry, followed by gold and base metals.
  • The extent of fiscal pressure on municipalities because of the pandemic began to emerge in May. Because the metros depend primarily on their own revenue, rather than national grants, they faced the greatest difficulties, since their income plummeted while demands increased. The national government has committed R20 billion for assistance, but has not yet indicated allocations between municipalities. In any case the funds will likely only become available in early August, following the adjustment budget.

Download a copy or read the Tracker online

Presentations

Neva Makgetla: TIPS COVID-19 Tracker: The economy and the pandemic
Owen Willcox: The macroeconomic response to the COVID crisis
Gaylor Montmasson-Clair: A case for a green and just economic stimulus package

Media

Why QE is the best way to fund stimulus needed to get SA throughCovid-19 crisis (LynleyDonnelly - Business Day 4 June 2020)
Placing green stimulus at heart of South Africa's postpandemic recovery would yield big co-benefits (Terence Creamer - Engineering News 4 June 2020)

Background

The 2020 forecast for South Africa's economic growth at -7% would be the worst since democracy, and is likely to come with massive job losses and firms closing down. There are however options to mitigate the economic impact of the disease. They include a shift in the macro-economic approach as well as ramping up new industries, including renewables. This Development Dialogue will start with a review of the latest trends in the pandemic and the economy, and then consider at-scale responses to the economic downturn.

About the Speakers

Baba-Tamana Gqubule is a senior economist at TIPS and has experience as a Policy Analyst at the Economic Development Department.
Owen Willcox is a Principal Consultant at Oxford Policy Management and previously worked at National Treasury for 11 years.
Gaylor Montmasson-Clair is a senior economist at TIPS. Gaylor has written extensively on the green economy, renewables and the just transition.
Neva Makgetla is a senior economist at TIPS. Dr Makgetla has published widely on the South African economy and worked for many years in government.

  • Date Thursday, 04 June 2020
  • Time 9:35-10:45
  • Venue ZOOM: Meeting ID: 889 3804 5188 Password: 898775
  • Main Speakers Baba Gqubule (TIPS) Neva Makgetla (TIPS), Owen Willcox (Oxford Policy Management) and Gaylor Montmasson-Clair (TIPS)
  • For enquiries or to register please contact daphney@tips.org.za
  • Organisation TIPS
Thursday, 21 May 2020

COVID-19 and the economy

COVID-19 is having a massive disruptive effect on the local and global economy. Since the start of the outbreak, TIPS has prepared and commissioned a number of research reports and policy briefs on the economic impact of the pandemic, and is now producing a weekly Tracker on the economy and the pandemic. TIPS has also held seminars and participated in several panel discussions on the economic impact of COVID-19.

TIPS Tracker: The economy and the pandemic

Policy Briefs

Working papers

Media articles

Published in Projects
Topic:

TIPS Tracker on the economy and the pandemic highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. This issue also looks at the challenges facing the auto and music industries. See 21 September - 4 October 2020.

Published in Announcements

As South Africa responds to COVID-19 and aims to stimulate the economy post lockdown through an infrastructure-led package, an opportunity exists to address many of the electricity-related challenges in the country by unlocking the potential of renewable energy technologies. This policy brief looks at the benefits of including renewable energy in the country’s stimulus package and considers possible avenues to do so.

Download a copy or read the policy brief online.

  • Year 2020
  • Author(s) Gaylor Montmasson-Clair (TIPS)
Published in Policy Briefs