DURBAN – The demand for products and services declined by 90 percent in KwaZulu-Natal (KZN) during level 5 and 4 of the national lockdown that was put in place in March by President Cyril Ramaphosa to curb the spread of the coronavirus (Covid-19) pandemic.
The province’s Cabinet Economic Cluster chairperson Nomusa Dube-Ncube said that this resulted in reduced cash flow and inability to meet operational costs and fixed asset repayments.
This was revealed in the Covid-19 KZN Economic and Business Impact Assessment Report received by the province’s MEC for Economic Development, Tourism and Environment Affairs (EDTEA) and leader of government business which was conducted jointly by the Department of Economic Development, Tourism and Environmental Affairs, KZN Business Chambers Council and University of KwaZulu-Natal’s Graduate School of Business.
The survey was conducted during the transition from Covid-19 Level 4 (15-31st May) to Covid-19 Level 3 (1st -15th June).
All the members of the KZN Economic Council are said to have noted with a high level of concern the report which have shown the devastating impact of Covid-19.
Dube-Ncube said that they have noted that 30.5 percent both employers-employees were experiencing mental health issues such as anxiety and despair.
The report also noted that at 45,7 percent of employees and staffing levels were severely affected to the extent that salary cuts had to be introduced. Some employees have been temporarily laid off.
At least 29.7 percent of employees have been required to take paid leave. Wages remained normal only through UIF TERS support.
Reduced sustainability of business went to 14.5 percent going into liquidation /mothballing during the period of the survey.
Dube-Ncube said that the council needed to channel their energies and resources towards building local capacity. “The outbreak of Covid-19 has exposed our economy and showed that we are only consumers of goods. In addition, big business and social partners in the council have agreed to strengthen the implementation of concrete plans geared towards the re-engineering of the provincial economy,” said Dube-Ncube.
The council said that as the as the province moved forward, they wanted the people of this province to be skilled and be given support that would enable them to produce local products for domestic consumption and exports.
“I have stated that the lockdown regulations, which resulted in the disruption of global value chain, should be viewed as a blessing in disguise. The lockdown has presented us as indigenous people with the opportunity to be self-sufficient and produce their own goods,” said Dube-Ncube.
EDTEA has been mandated to finalise the KZN Localisation Framework so that they ensured that local people benefited from economic opportunities at the local level.
The council has agreed to speed up huge investment in infrastructure by the government and the private sector because they believed that such investments would result in a higher growth rate, especially in the construction sector than many other sectors.
KwaZulu-Natal is the country's second largest economy.