Something rare happened in South Africa last week that may have already, and could in future, influence government’s thinking on the re-opening of the economy, says the Bureau for Economic Research (BER).
In a research note, the group referred to the fact that Cosatu, the biggest labour federation in the country, came out in support of the business sector’s call on the government to move faster to a less restrictive lockdown.
“To some extent, government seems to have heeded the calls for re-opening more of the economy,” the BER said. “On Wednesday, Ramaphosa announced that most of South Africa would move from alert level 4 to level 3 by the end of the month.
“Amongst others, this is expected to allow for the sale of all clothing, hardware sales to the general public and the re-opening of liquor outlets, albeit only on selected days and hours.”
While the lifting of these restrictions may be welcomed, the BER noted that the liquor regulations, as with the short hours for exercise, may have the opposite effect of the intended goal of social distancing as consumers flock to the stores during the limited hours.
“Ramaphosa also hinted that some Level 4 regulations would be relaxed. This was followed on Thursday by a significant easing in the restriction on e-commerce. Excluding sales of alcohol and tobacco, all e-commerce is now allowed.
“This decision took way too long, but is very welcome, especially after mind-boggling regulations regarding clothing sales and vehicle repairs were gazetted earlier in the week.”
On a more sour note, the BER said that the plan to move to district-based lockdowns is unlikely to work.
“Both the Gauteng and Western Cape Premiers have since commented that district-level differences are unlikely to work due to the integrated nature of districts – including logistical supply chains.
“We have cautioned in the past that the intuition behind the district differences makes sense, but that it will be difficult to implement practically.
“However, at the same time, it is also problematic to argue the case for keeping certain districts with very few remaining active cases under a strict alert level until the hotspots see fewer cases.”
The BER said that where possible, and with the necessary health protocols in place, activity (especially in those sectors that do not interact with the general public) should be allowed to return to normal to prevent a large number of permanent business closures.