As Covid-19 infections drop in South Africa, lockdown relief could follow: economists

 ·25 Jan 2021

In its rates announcement on Thursday (21 January), the South African Reserve Bank expressed confidence that the second Covid-19 wave in South Africa had peaked.

This has been echoed by the Department of Health’s statistical data which shows a steady decline in Covid-19 numbers since the first week of January, say analysts at Stellenbosch University’s Bureau for Economic Research (BER).

“The seven-day rolling average of new cases has come down to less than 11,000, from close to 19,000 on 11 January,” the BER said.

“The number of active cases is also in decline. With the rate of new hospital admissions also falling, the reduction in new cases is most welcome, both from a public health and economic perspective.”

On Friday (22 January), the Department of Health said it has observed a decline in Covid-19 transmissions in South Africa over the previous week.

“We are hoping that this decline in numbers is going to bring the much-required reprieve to our overwhelmed health facilities, both in the public and private sector.

“We are closely monitoring this to inform our process of recommending the review of some of the restrictions that are currently in place.”

The Department said it was grateful to all South Africans for playing their role in mitigating the devastating effects of Covid-19.

“We do, however, continue to caution that the transmission rate is still very high and we need to ensure that it is reduced to an acceptable level before we can ease restrictions.

“It is therefore imperative that we do not grow fatigued and continue to focus on the things we know provide protection – the strict wearing of masks, social distancing and regular sanitisation of hands and surfaces.”


From an economic perspective, the Covid-19 infection trajectory, if sustained, should enable the government to soon provide relief to the country’s hardest-hit sectors, the BER said.

This could include support to the hospitality and liquor industry by moving back to a less onerous level of restrictions on mobility and economic activity.

“The cumulative effect of the current and previous alcohol bans have now seen both SAB and Heineken announce job cuts. This follows earlier announcements on the curtailment of capital expenditure by the beer giants,” it said.

Cause for concern

However, moving beyond the second wave, the outlook for Covid-19 in South Africa remains of real concern, the BER said.

It warned that vaccines cannot come soon enough after health experts, such as professor Shabir Madhi from Wits University, again cautioned that as the second wave resurgence dies down, there is a high probability that South Africa will suffer a third wave of infections.

“As we have written before, this is worrisome in light of the modest amount of vaccines government has to date secured.

“Along with the risk of periodic Eskom load-shedding, this is a crucial reason why we disagree with the SARB’s characterisation of the risks to their 3.6% real GDP growth forecast for 2021 as ‘balanced’. We view the domestic growth risks as firmly on the downside.,” it said.

Read: South Africa to receive first batch of Covid-19 vaccines: Ramaphosa

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