Signs point to South Africa’s level 4 lockdown being extended: economists

Besides the severe impact it is having on the health sector, the upcoming week’s Covid-19 statistics should influence whether the government decides on an extension of the two-week adjusted level 4 regulations, say economists at the Bureau for Economic Research (BER).

In a research note on Monday (5 July), the group pointed to the previous week of data which shows that South Africa saw record-high increases in daily new infections of above 24,000 on Friday and Saturday.

South Africa also frequents the global top-10 list of daily new cases per country, and with vaccination rates low, also registers high daily increases in Covid-related deaths.

“Unfortunately, given the progression of the third wave since the measures were announced, we think it is likely that most, if not all, of the current restrictions will be extended,” the BER said. This will then start to have a more meaningful adverse impact on the Q3 2021 GDP performance.”

While it is too early to tell whether the restrictions helped in limiting the spread of Covid-19 cases, the direct impact of the restrictions, the third wave and subsequent changes in consumer/firm behaviour on businesses is already apparent, the BER said.

“For example, Comair said it will suspend all Kulula and BA flights in SA for three weeks from today. Sun International also announced that all but two of its hotels and resorts would be closed during the two-week level 4 period, with many smaller businesses in the hospitality sector having made the same decision.”

The BER said that any extension of the level 4 restrictions will make it even more essential that the UIF/Ters scheme of income support for workers in the sectors hardest hit by the restrictions is speedily reactivated.

“This has received support from business and labour. Such measures will not impact the stretched public finances as the UIF has funds available. A formal announcement should be made this week,” it said.

More vaccine options?

A shift to other vaccine options – including the Chinese Sinovac vaccine could be key to the country’s recovery.

The vaccine is intended for people between the age of 18 and 59 and requires two doses (14-28 days apart). A trial in Brazil showed a 51% efficacy against symptomatic Covid infections, but 100% protection against severe Covid symptoms and hospitalisation (after 14 days following the second dose).

Regulators are still reviewing emergency-use applications for the Russian Sputnik and Chinese Sinopharm vaccines, the BER said.

“The South African government is reportedly also reconsidering using the AstraZeneca vaccine. Studies have shown this vaccine to be highly effective against the Delta strain.

“Government sold one million of these vaccines a few months ago after the vaccine was found not to be effective in preventing illness in the case of the Beta variant that was the earlier dominant variant in South Africa.”

Read: The area that will be key to South Africa’s recovery: Ramaphosa