Business for South Africa (B4SA) says the national Covid-19 infection rate in South Africa will likely peak during August 2020, with daily mortalities peaking by late-August or early September.
Citing scientific modelling, the group added that the Western Cape has ‘turned the corner’ with lower weekly confirmed case numbers and slowly declining mortality figures. The load on the hospital system in the province has also adjusted to manageable levels, it said.
“The overall projections for the country may still shift depending on the degree to which the infection rate evolves in Gauteng, currently the epicentre of the infection, and the Eastern Cape and KwaZulu-Natal where rising infection rates remain a concern.
“A significant number of businesses are already in distress with further job losses of about 1.5 million expected by the end of 2020.”
The group’s economic modelling suggests that a one percentage point increase/decrease in real GDP growth leads to a near equal percentage point increase/decrease in employment.
B4SA said it anticipates that Gross Domestic Product (GDP) could contract between 8-10% in 2020.
“Against our latest modelling scenarios we expect that it will take a minimum of two years for the South African economy to recover to pre-Covid-19 levels, keeping in mind that South Africa’s economy was already weak at the start of 2020,” said Martin Kingston, head of the economic workgroup for B4SA.
”We also expect the infection rate to have a long tail-off and for the virus to remain a reality of daily life for up to two more years.”
Kingston said every part of society must work together to ensure South Africans are able to work in the safest possible manner – whether that be as part of the state, business, NGO or individuals – and working practices must adapt to meet the health, safety, and hygiene protocols required to combat Covid-19.
This includes employer obligations in respect of employees over the age of 60 or those with specified co-morbidities, he said.
With the possibility of the coronavirus remaining in South Africa for a number of years, Kingston indicated that economic reforms would also be important.
“While the challenges South Africa faces in addressing the Covid-19 crisis will pass, rejuvenating our economy and rebuilding society will require our collective focus in the future to accelerate inclusive economic growth and employment,” he said.
B4SA has also published a proposal document indicating on the areas that the government should focus on to kickstart these reforms. These include:
- Tackling crime and corruption;
- Improving the ease of doing business;
- Mobilising large-scale infrastructure projects;
- SOE reform and rationalisation;
- Clarity on land reform;
- Education and skills development;
- Review of trade policies;
- Labour law reform;
- Simplifying mining investment regulations;
- Aligning the national energy strategy across sectors;
- Maximising connectivity through telecoms;
- Fiscal inclusion and financial support.