The Covid-19 lockdown has had a significant impact on South Africa’s economy and will lead to hundreds of thousands of jobs losses, says Gauteng premier David Makhura.
Presenting to the Gauteng legislature on Tuesday (19 May), Makhura said that the provincial government has developed a number of extensive models to analyse how severe job losses will be in the province.
While these models had originally shown that the province could lose around 600,000 jobs as a low-end estimate, this number has now been revised significantly upwards, he said.
“In the best-case scenario, we will have around 890,000 people losing jobs across the provincial economy.
“In a worst-case scenario, the number of jobs lost will total around two million. With the estimated number of job losses expected to reach seven million nationally, this is obviously quite severe.”
Makhura said that the government will need to introduce a special economic stimulus to help offset these job losses.
Business for South Africa, a group of business organisations, has warned that 4 million jobs will be placed at risk and the economy could contract 16% this year if the easing of lockdown rules isn’t accelerated.
The government initially imposed a 21-day lockdown on March 27 to curb the spread of the virus, later extending it by two weeks. Enforced by the police and military, it only allowed people to leave their homes to buy food, collect welfare grants and seek medical care – unless they provided essential services.
While the severity of the lockdown was adjusted from the maximum level 5 to level 4 on May 1, allowing commerce to resume, many businesses remain partially or completely shut.
“Despite its duration and its severity, the lockdown that we’ve imposed was absolutely necessary,” Ramaphosa said.
“Without the lockdown, the number of coronavirus infections would have soared uncontrollably. Our health facilities would have been overwhelmed and many thousands of South African would have died,” the president said.
While South Africa’s 17,200 confirmed coronavirus infections and 312 fatalities are low compared with nations such as the US, Spain and Italy, the number of cases has risen over recent weeks as testing and screening increased. The government expects infections to peak in August or September.