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South African economy cannot afford another hard lockdown, say economists

By Xolile Bhengu Time of article published Jul 8, 2021

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DURBAN – Economists have cautioned the government that if it imposes another heavy lockdown, it may bring the country to its knees.

Mike Schussler from said the tourism industry across the country had been severely impacted.

“We cannot afford another lockdown, people have already used their reserves during the first lockdowns. Coastal areas such as KwaZulu-Natal, Eastern Cape, the Western Cape, and also tourism dependent provinces such as Mpumalanga are really hurt by the lack of tourism.”

Schussler said there has been a very big knock-on effect for the country from restricted travel, eateries, and hotel accommodation.

He said the lockdown has had a traumatic effect on businesses.

“Other suppliers have also been affected by the lack of tourism. For instance, Uber drivers who would have benefited from the revenue of driving travellers between provincial airports, hotels, laundromats that would have catered for business travel tourism, promotions, presentations, delivery services, and even gift shops would be feeling the impact of restrictions.”

Dawie Roodt, chief economist for the Efficient Group said: “If we go for another lockdown we will cause immense damage to the economy. We have had a stagnant economy for the last 10 years, we should rather impose other ways to mitigate risk. Last year we lost over a million jobs in South Africa. It is not only individuals but businesses that have had to dip into their reserves to keep the economy running. An extended lockdown will lead to job losses. People are hungry and the lockdowns need to be revisited.”

Wendy Alberts from the Restaurant Association of South Africa (Rasa) said the organisation was inundated with requests for assistance and calls to government to mitigate risks for business had, so far, fallen on deaf ears.

Alberts urged the government to look at the proposals it had offered to them such as road house concepts, to protect employment.

Schussler added that retail property companies and property owners would be affected as tenants would not be able to meet their rental commitments.

“This means new office buildings are unlikely to be built, which also affects the construction industry. Another industry that may be overlooked is the entertainment industry which would be affected by the lockdowns.”

He suggested that the government needed to re-evaluate the effectiveness of lockdowns and the impact on the economy.


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