Gauteng hospitals are in for a rough few weeks: economists
South Africa’s seven-day rolling average of new Covid-19 cases has surged past the peak of the first Covid wave, which spells bad news for hospitals, healthcare facilities, and the economy – particularly in Gauteng.
This is according to economists from the University of Stellenbosch’s Bureau for Economic Research (BER), commenting on the latest Covid trends in the country.
It noted that the seven-day rolling average of new cases is now above 15,000 across the country as a whole, surpassing the peak of the first wave.
“The test positivity rate rose to an alarming 27%, implying that more than one out of every four Covid tests are positive.
“According to the World Health Organisation, the test positivity rate needs to be at 5% for a pandemic to be under control,” it said.
Things are looking particularly bad in Gauteng, where the seven-day average of new cases remains well ahead of both its first and second wave peak, with reports of a shortage of hospital beds and other critical medical supplies.
“Given the lag between positive Covid tests and hospital admissions, the Gauteng health sector is in for a very tough couple of weeks,” it said.
Worse still, this trend is expected to carry over to other provinces as well. The national Department of Health said over the weekend that it now expects the third wave in most provinces to be
worse than the second.
The third wave is being driven by a highly infectious variant of Covid-19 called the delta variant, which was first discovered in India earlier this year. The variant is far more infections, estimated to be doubly so, though it is not yet clear if it is more severe.
Economic impact
The third wave will undoubtedly have a negative impact on the economy, the BER said.
Several new restrictions were announced on Sunday evening by president Cyril Ramaphosa under an adjusted lockdown level 4, in a bid to combat the rising number of cases.
These include restrictions on travel, a ban on gatherings and alcohol, as well as shuttering a number of businesses like gyms, cinemas, taverns and restaurants for sit-in meals.
As has been the case throughout the pandemic, it is the liquor, hospitality and aviation industries that will be impacted the most.
“In terms of the broader economic impact of the surging cases in Gauteng/third wave across the country, the question remains to what extent individual consumers will self-restrict their movements to, for example, shopping centres and restaurants,” the BER said.
“The latest Google mobility data for Gauteng suggests that this has already happened.”
The BER said that Gauteng mobility showed a 16% decline relative to the baseline, and this is likely to intensify further as the province moves to an expected peak of infections in early July.
As the economic hub of South Africa, this has a major impact on national production.
“The bottom line is that we are likely to see a notable loss of GDP growth momentum in the third quarter as consumers and firms turn more cautious again,” it said.
Business blowback
Businesses – particularly in the alcohol industry – are already hitting back against the lockdown restrictions, warning of job losses and closures.
The Beer Association of South Africa (BASA) said it is now seeking legal advice on the national government’s decision, in the interest of protecting jobs and livelihoods.
“We have repeatedly communicated to the government how the previous three alcohol bans have devastated thousands of small businesses across the beer value chain leaving business owners, their employees and families destitute.
“Many more businesses will now find themselves on the brink of closure as a result of the latest 14-day ban and no financial relief being made available by the government.”
The Restaurant Association of South Africa (RASA), said that restaurants will be the hardest hit, with no discussions, and no Temporary Employer/Employee Relief Scheme or financial support from the government.
“The industry is going to be destroyed. Deliveries won’t save restaurants given the large commissions they need to pay third-party delivery groups,” it said.
Thousands of restaurants had closed since the lockdown was first introduced in 2020, it said, with the latest restrictions set to be the end for many more.
Read: Lockdown level 4 is a killer blow for businesses and jobs in South Africa: industry
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