Don’t expect freedom of movement once the extended lockdown period has ended in South Africa.
The country has entered phase two of the lockdown period, which is expected to last for two weeks, through to the end of April, and under changed regulations, as announced by the government on Thursday (16 April).
“Today, we’re not coming with many new regulations. We’re extending the regulations that exist because the lockdown was extended,” said Cooperative Governance and Traditional Affairs (Cogta) minister, Dr Nkosazana Dlamini-Zuma, in an address to the nation.
“When we do stop the lockdown, we can’t do it abruptly. We have to phase it in so that there’s an orderly move towards what would be normality,” said Dlamini-Zuma.
She, however, stressed that precautionary measures will remain beyond the lockdown to safeguard the health of the nation.
“It doesn’t mean that after the lockdown, everything will go back to normal.”
Peter Attard Montalto of Intellidex, a capital markets and financial services research house, said that there has been some promise that further relaxations will occur in the coming weeks, “but we are yet to see a proper risk adjusted approach with any business able to resume if it can show appropriate health protocols”.
“The government’s command and control mindset is still hampering the transition to this mode,” he said.
Attard Montalto said that the government’s message is conflicting, with talk about lockdown ending, but then also saying it could be extended.
“We do expect government to eventually switch to this risk adjusted mindset and that after that we enter a new phase which may well have to last till start September at least when DoH (Department of Health) currently see the number of cases peaking at the end of winter,” he said.
Crucially for the average South African, Attard Montalto said that a generalised ban on movement however, is likely to be extended from the end April, though allowing more firms to work with health protocols.
“That said the alternative scenario is that we see the lockdown end to some degree in May, but then have to be put back in place through end June and into July as case and death numbers accelerate fastest in mid-winter. Both scenarios are broadly the same in terms of economic impact,” he said.
The net result for the country’s growth prospects is clearly negative, with Attard Montalto forecasting -9.7% GDP growth for this year, 4.5% for 2021 and 2.5% for 2021.
“We see around 1.5 million jobs lost currently with this forecast though the number at risk is much higher, the forecast includes the furlough ability allowed by UIF policies,” he said.
“Note we still strongly hint that the impact here will last longer and there will be further extensions. We also think about a scenario of a phased risk adjusted approach lasting till start September which could see growth of around -15.5% this year.
“This however would see major job losses of over 2 million people and so we get into a circle problem of the scenario becoming impossible to implement,” the analyst said.
Cabinet said in a statement on Thursday that all clusters have been asked to work together to produce one consolidated document on key priorities of the country’s economic recovery plan, to be completed before the next cabinet meeting scheduled to take place on Monday, 20 April 2020.
It’s not only the economy at stake. South African society is also at risk if the government extends a five-week lockdown without allowing more industries to get back to work, said Investec Group chief executive officer Fani Titi, and the head of the company’s South African banking unit, Richard Wainwright.
“We don’t have the capacity to absorb the kind of job losses that could result,” Titi said via a video conference call, as reported by Bloomberg. “We would see significant damage to the economy, but also to the social fabric.”
“They’re going to have to select types of businesses and industries where it is practical to start lifting the lockdown restrictions,” said Wainwright. “But at the same time protecting people whether it is through social distancing or screening technology.”
Political analyst Daniel Silke also warned that the extended lockdown will test the limits of South Africans’ tolerance to be unnaturally isolated, noting that even within the first three weeks there was a marked increase in looting and unrest.
While most of society, including businesses and opposition parties and citizens in general stood in solidarity with the move – during the extended period, these ties will fray and start to come undone.
Political parties, who have been generally locked out of the response to the Covid-19 crisis up until now, will start speaking out and calling for (their alternatives), businesses will struggle further, and criminal elements will take full advantage, Silke said.
“Five weeks of lockdown are likely to stretch the tolerance of citizens who are unnaturally confined to their homes and prevented from more regular activities.
“Already, we have seen liquor stores looted, illicit tobacco dealings back in action and abandoned schools vandalised. Crime therefore is mutating as the lockdown creates new avenues for offences,” Silke said.
“Thus far, South Africa has managed a commendable show of unity of purpose. But don’t expect this to last forever. ”