SA economy will need 2 years to recover from Covid-19 outbreak
CAPE TOWN - Business for South Africa (B4SA) said on Tuesday that it expected the economy would take two years to get back to pre-Covid-19 levels.
Martin Kingston, the head of the economic work group for the organisation, said yesterday that the economy had already been weak at the start of 2020.
He said B4SA, which provides input to the government on its response to the Covid-19 pandemic from the private sector perspective, also predicted the infection rate would have a long tail-off, and the virus could remain a reality of daily life for up to two more years.
Job losses were estimated at 1.5 million by the end of 2020. The national Covid-19 infection rate was expected to peak through August 2020, with daily mortalities peaking by late-August or early September.
However, said Kingston, the overall projections might still shift depending on the degree to which the infection rate evolved in Gauteng, the epicentre of the infection, and the Eastern Cape and KwaZulu-Natal, where rising infection rates were a concern.
The Return2Work Initiative offered businesses clear guidance on re-opening and staying open, incorporating key legal requirements and tools to minimise infection, including guidelines for businesses in the informal sector.
Transport protocols were also available to support employees in accessing safe public transport.
He said while the challenges of addressing the Covid-19 crisis would pass, rejuvenating the economy and rebuilding society would require our collective focus in the future to accelerate inclusive economic growth and employment.
B4SA, with the Black Business Council, Business Unity South Africa, Business Leadership South Africa, Association for Savings and Investment South Africa, Banking Association South Africa and the Minerals Council, had formulated an economic recovery strategy.
B4SA said this strategy could harness South Africa’s potential in the shortest possible time by leveraging all resources – across government, business, and civil society – to address the economic and social challenges.
Elna van Wyk, the head of Group Disability and Underwriting at Momentum, said, “We saw requests from employers for relief peak at about 25% of our employer client base. Of those 25% of employers who have requested relief just over 60% have put their staff on unpaid leave, 5% have reduced salaries and the balance have asked for a postponement of contributions to alleviate cash-flow constraints.”
She said the lockdown, and with employees working from home, was a stressful period for staff and business leaders, and the group was anticipating an influx of mental health claims.
She said there were growing incidences where staff did not wish to disclose their Covid-19 status for fear of being held accountable for the financial losses suffered by the company for their inability to work, and their possible impact on other employees’ ability to work.
With 93 percent of all business relationships currently digitised, it was difficult to build true relationships in businesses and understanding intents and tone was more difficult.
She said many employees had put off taking leave, and an increasing number of business owners were changing leave policies because they were concerned about the large amounts of cash they would need to pay out to employees for deferred leave days, when the employee either resigned or was retrenched.