Level 4 lockdown likely to last much longer than just two weeks in South Africa: analyst

Adjusted lockdown level 4 restrictions announced by president Cyril Ramaphosa on Sunday evening could last much longer than the announced 14-day period, which will keep households and businesses under pressure, with little to no support from the government.

This is according to Intellidex analyst Peter Attard Montalto, who told CNBC Africa that while the lockdown restrictions put in place by the president are “broadly appropriate”, the main problem is that they came far too late – particularly in Gauteng.

The analyst said that there was sufficient evidence in terms of rising case numbers and an escalation in excess deaths in the preceding weeks to have implemented the restrictions a lot earlier.

“We should have had them much, much earlier. It didn’t require knowledge and confirmation of the Delta variant – the pace (of cases and deaths) was sufficiently fast that (the restrictions) should have been put in place anyway,” he said.

Despite some evidence that measures like the alcohol ban would alleviate some pressure on hospitals in terms of ICU capacity, Attard Montalto described the ban as “an exceptionally blunt instrument” – and comes with no additional support for the industry through funding or through the Temporary Employee/Employer Relief Scheme.

Various industry bodies and unions have called on the government to offer some form of financial support during the latest lockdown, which has seen restaurants, gyms, stores and even hotels and lodges shut down due to the restrictions on most of their revenue centres.

However, the government said there are no immediate plans to provide any support. Therein lies the biggest problem, Attard Montalto said.

“There is a problem with the framing of this as a two-week issue. That was the central contradiction of the president’s message – saying that the third wave will last longer than the previous two, yet at the same time saying this (lockdown) was only two weeks.

“Given the two-week focus, that additional support has really fallen through the gap,” he said.

The analyst said that forecasts for South Africa’s growth in 2021 will have to be trimmed ‘slightly’ to take the lockdown into account – but this will be adjusted based on an assumption that it will last longer than the two weeks announced by the president.

“Forecasts will be adjusted based on the hospitality restrictions, assuming this is a month-long – rather than two-week – lockdown,” he said.

However, Attard Montalto noted that the level 4 restrictions are still far from what South Africa experienced during the initial pandemic when the country was forced into a full lockdown.

“This isn’t a stay-at-home order. Most economic activity can still continue – particularly mining. But it will have a negative sentiment impact on the economy,” he said. The longer the lockdown persists, the greater the impact will be.

According to Ramaphosa, the level 4 lockdown will be in effect until 11 July, at which point the situation will be assessed and further pronouncements made.

Read: Push for government to reintroduce financial support during level 4 lockdown in South Africa

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Level 4 lockdown likely to last much longer than just two weeks in South Africa: analyst