In an effort to continue easing lockdown the government's lockdown measures, Trade and Industry Minister, Ebrahim Patel on Tuesday gazetted guidelines to provide direction on the type of clothing, footwear and bedding which may be sold by retailers during Level 4 of the national lockdown. Photo: Thobile Mathonsi/African News Agency (ANA)
In an effort to continue easing lockdown the government's lockdown measures, Trade and Industry Minister, Ebrahim Patel on Tuesday gazetted guidelines to provide direction on the type of clothing, footwear and bedding which may be sold by retailers during Level 4 of the national lockdown. Photo: Thobile Mathonsi/African News Agency (ANA)

SA should open the economy more widely with stringent health regulations

By Dineo Faku Time of article published May 13, 2020

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JOHANNESBURG – South Africa should immediately open up the economy more widely with stringent health regulations in place, experts said yesterday, after the government expanded services and products to be sold during Level 4 of the national lockdown.

In an effort to continue easing lockdown the government's lockdown measures, Trade and Industry Minister, Ebrahim Patel on Tuesday gazetted guidelines to provide direction on the type of clothing, footwear and bedding which may be sold by retailers during Level 4 of the national lockdown.

Patel also permitted the trade in new and used cars, wholesale trade of new and used cars by original equipment manufacturers and importers and the export and import of cars under strict guidelines. 

Patel said that the manufacturing and retail sector had been through a very difficult time and the resumption of clothing sales under Level 4 of the new risk-adjusted approach, would assist to provide greater levels of production.

“Restarting more parts of our economy is important and we are working hard to ensure that industry follows best practice to protect the health and safety of all our citizens,” said Patel.

However, Annabel Bishop, Investec’s chief economist said yesterday that opening only some parts of the economy was not enough.

“Absolutely all eCommerce, all shops that can deliver goods – all manufacturing, mining, and areas of production should be open. Severe enforcement by the establishments on social distancing masks, shields is paramount for this to occur, with frequent checks from officials,” said  Bishop adding that the government should consider reopening tourism and entertainment establishments, to save jobs and livelihoods.

Bishop said the South African economy was expected to contract by more than previously estimated, with Bloomberg’s economic consensus at the end of April showing an expected 5 percent year-on-year contraction for 2020.

“We estimated a contraction for 2020 of -4.8 percent year-on-year in mid-April, but on the basis, at that time, that the South African economy would open up more quickly. Instead, April has been on Level 5, resulting in an extreme cessation of business activity, for much of the month,” she said.

She said that May had seen the still highly restrictive Level 4, with many businesses still shut, and for many of those that are allowed open, only seeing 50 percent production.  The Foschini Group (TFG) chief executive and chair of the National Clothing Retail Federation of South Africa (NCRF), Anthony Thunstrom on Thursday, welcomed the new directions.

“The federation has participated in a robust engagement with government and stakeholders to construct the list of essential consumer items for winter clothing and textile items,”   Thunstrom said.

The NCRF is a federation whose clothing members include retail giants Truworths, Woolworths, Mr. Price, The Foschini Group, Pick n Pay, and Queenspark.Lulama Qongqo, an investment analyst at Mergence Investment Managers said the easing of lockdown was unlikely to revive the fortunes of retailers.

”The restrictions still mean that retailers can’t have the end of season sales for items that are not in the gazette,” she said. Given that all clothing retailers were barred from selling during stage 5 and are now desperately trying to sell items in order to meet financial obligations – they are selling stock they would have otherwise sold at full price (winter stock) at a discount,” she said

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