Displaying items by tag: South Africa economy

The Tracker added 23 projects in the fourth quarter of 2023 with a pledged investment value amounting to R478.7 billion recorded from 12 projects. The other 11 projects have not yet reported their respective project values. Monitoring updated 28 pre-existing projects to the Tracker this quarter.

The Quarterly Labour Force Survey (QLFS) data for the second quarter of 2020 was published by Statistics South Africa on 29 September. The most important findings are the relatively heavy hit that the COVID-19 pandemic inflicted on lower-level workers, especially informal workers who are typically engaged in low paying and precarious work. The QLFS finds that the number of
employed people decreased from 16.4 million in the first quarter of 2020 to 14.2 million in the second quarter, for a loss of
2.3 million jobs or 13.5%.

This policy brief looks at the impact of COVID-19 on employment in quarter two of 2020, with a focus on trends in formal sector employment, sectoral employment and implications for race and gender inequality, particularly in vulnerable sectors. It looks at the impact on industries in which many women work, such as private households and community services, and makes some policy recommendations.

Read online: Employment trends in the South African economy

This report presents investment projects captured in Q1 and Q2 of 2020. Q1 and Q2 have been combined mainly because of the low number of investment projects announced in Q1 2020, combined with general delays in the release of certain data, such as those which inform the investment environment analysis. This was anticipated when investment globally was impacted by the slowdown in economic activity as strict measures were implemented in response to the COVID-19 pandemic. A total of 35 projects were recorded over the two quarters, with 27 projects identified in Q1, and eight projects in Q2. Over half the number of investments captured over the two quarters were by three companies. The total pledged investment value is R43.8 billion from 30 projects. Tracking further captured 3 320 job opportunities from eight projects, seven of which are by one company representing 3 300 jobs. These jobs are likely a mix of permanent and temporary opportunities as the company did not explicitly distinguish jobs by this segmentation. In this period seven projects were upgraded.

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.

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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.

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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.

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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.

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With greenhouse gas (GHG) emissions coming to the fore of nations’ climate policy concerns, the wine industry faces a new challenge. Viniculture (grape cultivation for winemaking) is directly susceptible to climate change impacts due to grapevines being highly sensitive to the surrounding environment, such as changes in weather patterns. In addition, the industry is increasingly targeted by climate change response measures, aimed at reducing GHG emissions. Such measures are poised to significantly alter traditional methods of production. Trade-related climate change response measures, such as shifts in import-export patterns, border carbon adjustments or non-tariff barriers (such as standards), are also increasingly more prevalent.

South Africa is the world’s sixth largest exporter of wine in volume and has not been exempt from these trade impacts. This paper unpacks the green protectionism dynamics which have increasingly impacted the domestic wine value chain and stand to be a growing risk moving forward. The paper also explores the factors that make it particularly difficult and yet necessary for South African producers to adapt to this new genus of regulation.

This report was produced by TIPS for the Department of Trade, Industry and Competition

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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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.

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In the first quarter of 2020, which represents the period before widespread global lockdowns were implemented due to the COVID-19 crisis, South Africa continued with a positive trade balance. A trade surplus of R34.7 billion in constant rand was recorded in Q1 2020, up by 42% from the previous quarter. The increase in the trade balance is attributed to exports having declined at a much lower rate than imports as an initial response to the COVID-19 economic impact, as well as a decline in imports due to the earlier shut down in China and a significant drop in the value of crude oil imports of about R10.5 billion.

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.

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A larger number of projects were captured in the FDI Tracker for the final quarter of 2019 due to the President’s Investment Conference held in November 2019. A total of 31 projects were captured, consisting of a mix of projects announced at the conference and those announced or taking place before the conference. Based on these developments, the fourth quarter of 2019 recorded the highest number of projects and the highest pledged investment value for 2019, with a total pledged investment value of R68.6 billion from 27 projects.

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.

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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.

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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

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 rate of growth in cases surged in KwaZulu Natal and Gauteng, although it slowed in the Western Cape. If the rate of growth outside of the Western Cape is not contained, the number of cases there will double in two weeks – about a week sooner than if the rate of growth had remained the same as last week.
• Government’s decision to define Level 3 as opening most of the economy plus churches and schools represented a fundamental shift in approach and responsibility. It required individuals and groups to manage risk rather than adhering to regulations banning hazardous activities. To succeed, this strategy must combine measures to ensure that people have the information and resources they need for sound decision-making with stringent and swift management of outbreaks. Government did not, however, move to substantially scale-up programmes and expertise to help individuals understand risks and change their behaviour. Nonetheless, it appeared increasingly willing to permit even highly risky activities to reopen in the near future.
• New studies suggested that COVID-19 is disproportionately spread through a few super-spreading events, typically when large numbers are in fairly crowded spaces for a significant period. By extension, the biggest risks under Level 3 arise from public transport, mines, churches, and spaces where significant groups meet at work, including during breaks.

On the economy

• Under Level 3, which starts on 1 June, all businesses except for personal services, recreation and sit-down restaurants will be permitted to reopen. That means that around 90% of workers could return to work, although employers must still have people work from home when possible.
• The third week of Level 4 showed only a limited increase in economic activity but a surge in work-related hotspots, notably in the mines but also in health and the police as well as some retail chains and factories. Most industries did not, however, appear to have a defined structure to identify and mitigate risk factors as they emerged.
• Significant differences emerged in the effectiveness of the various funds established to support workers, businesses and households during the lockdown. The programmes that built on existing programmes have disbursed billions of funds. In contrast, when disbursements required new systems to identify and appraise applicants, relatively few applicants have received any support.

Download a copy or read the Tracker online

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 number of new cases stabilised outside of the Western Cape, where they continued to escalate, and the Eastern Cape, where they fluctuate significantly over time. The average daily growth in identified cases declined in the most affected provinces (Western Cape, Gauteng, KwaZulu Natal and the Eastern Cape), but increased sharply in Limpopo as three major mines reported outbreaks.
• The Western Cape effectively faced a qualitatively different pandemic from the rest of South Africa, with 200 cases per 100 000 people compared to 13 per 100 000 in the rest of the country. The reasons included how the province managed screening and quarantine; relatively dense informal settlements with largely shared facilities; and its role as a global tourism hub.
• The main epidemiological model projects a spike in winter but indicates that it can be avoided if South Africans work to prevent infections through changes in behaviour, including
  reorganising work and public transport, and stringent public health measures.

On the economy

• On Sunday, 24 May, President Cyril Ramaphosa announced that all businesses could open except for recreational and personal services, as long as they had plans to maintain physical distancing. He did not, however, indicate how rigorous physical distancing measures would be, including in the high-risk areas of public transport and retail.
• The economic boost from the move to Level 4 largely ran out of steam, with only limited increases in economic activity in the second week. On Wednesday, the SARB predicted a 7% fall in the GDP for the year, down from its April forecast of a 6,1% decline.
• At the company level, four large mines closed temporarily due to outbreaks after resuming work under Level 4; a number of SOCs fell deeper into crisis; and the R500-million fund for small business was fully allocated by Friday, providing funds to around 5% of the applicants.
• The UIF had provided R14 billion to benefit 2,5 million furloughed workers. By the end of the week only 10 people had received the COVID-19 special grant (worth R350 a month), with another 100 000 applications finalised. All told, 4,5 million had applied and 2,6 million had been verified.

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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.

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.

Download copy or read Tracker online.