JOHANNESBURG - The South African government has forecast that millions of jobs will be lost this year as the coronavirus (Covid-19) pandemic and the credit ratings downgrades weigh on the economy.
In a presentation to parliamentary committees on finance today, the National Treasury said it projected that between 3 to 7 million will be shed as a result of the protracted nationwide lockdown.
Treasury said it estimated that approximately one-third of the resources that were productive in February had been idled, largely as a result of the domestic lockdown.
As a result of global supply-chain disruptions, Treasury said there was an increased risk of rising liquidations and workers being put on short-time or retrenched due to lack of demand.
“Real-time economic data, such as average daily transaction values through the payment system have more than halved as economic activity has declined,” it said.
“The poor may find it more difficult to recover from the outbreak due to lower accumulated savings, the impact of funeral costs and loss of breadwinner income.”
This staggering figure is far worse than any previously thought as the SA Reserve Bank this month forecast that about 370 000 jobs would be lost and 1 600 businesses go insolvent.
The government would from tomorrow ease some restrictions and allow a number of industries to operate in a phased approach to reopen the economy.
Democratic Alliance spokesperson on finance, Geordin Hill-Lewis called on the Treasury to support our call to open more of the economy safely.
“No leader or policymaker in South Africa can possibly be comfortable with such a high human cost to the lockdown. To do so would be deeply irresponsible. We must act now to avert these job losses,” Hill-Lewis said.
“Instead, we propose a model where industries themselves would determine what needs to be done to safely protect workers and customers, and any business that can comply with those requirements would be permitted to open.”