JOHANNESBURG - Banking transactions fell to an all-time low in April in South Africa as economic activity came to a halt due to the hard lockdown implemented to curb the spread of the coronavirus (Covid-19).
The BankservAfrica Economic Transaction Index (BETI) for April 2020 recorded the biggest decline in its history across monthly, quarterly and annual levels.
BankservAfrica’s Shergeran Naidoo said the BETI dropped by 12.3 percent between April and March, the biggest monthly decline on record.
Naidoo said the decline was also evident in the volume and value of transactions.
"The annual rate of decline was 13.9 percent in April and on a quarterly basis, this was -15.2 percent,” Naidoo said.
"The annual actual volume of transactions fell by 16.4 percent in April. The standardised nominal value of transactions, recorded by the BETI, declined in nominal value to R709.2 billion.”
The BETI is the quickest and broadest monthly indicator of economic activity in the local South African economy.
It captures interbank electronic payment transactions under R5 million to provide almost immediate feedback on the economic performance of most sectors.
Mike Schüssler, chief economist at economists.co.za said the collapse in economic activity in April was evident throughout all sectors as role players could transact with one another as they did before the crisis hit.
Schüssler said the real value of transactions in the BETI for April was at a level lower than at any time since February 2006.
“The South African economy shrank at the fastest rate on record in April while March also recorded a significant decline,” Schüssler said.
“The latest data provides a clear and broad indication of an economic collapse due to the coronavirus pandemic and the subsequent nationwide lockdown.”
Schüssler said parts of the economy will pick up again after the crisis is over and the BETI will reflect that.
However, Schüssler at present the economy was doing the same real value of ‘turnover’ that it did 14 years ago.
"The disappearing economic transactions in the crisis reflect the massive underlying economic damage the crisis has created," he said.