Professor Raymond Parsons says SA must not expect an immediate resumption of pre-lockdown levels of business activity as the country starts to recover economically. File picture: Pexels
Johannesburg - South Africans must not expect an immediate resumption of pre-lockdown levels of business activity as the country starts to recover economically.
Professor Raymond Parsons of North West University’s School of Economic and Management Science stated this in light of President Cyril Ramaphosa announcing that South Africa will move to coronavirus (Covid-19) level 2 alert and that the economy would open even more.
Tobacco and alcohol sales will resume this week and restaurants, bars and taverns will be permitted to operate under strict conditions, Ramaphosa said.
There will also be an easing of inter-provincial travel restrictions.
However, Parsons said the lifting of the ban on alcohol and tobacco sales and inter-provincial travel was welcomed, but that the economy would take up to two years to recover to pre-lockdown levels.
“At present the economic outlook is that SA’s GDP will contract by between 8% and 10% this year. If the economy’s basic resilience now comes to the fore as the remaining lockdown restrictions are steadily removed and we start to contemplate life after Covid-19, a positive GDP growth rate of between 2% and 3% is possible in 2021.
“SA must not expect an immediate resumption of pre-lockdown levels of business activity as the country starts to recover economically,” he said.
Cosatu national spokesperson Sizwe Pamla blasted as futile Ramaphosa’s decision to reopen the economy without accompanying the move with the injection of new money as a form of intervention for the battered economic sectors.
“This lack of an economic stimulus by government amid depressed private capital investment will continue to plunge and trap the economy into what is becoming a serial stagnation, characterised by episodes of technical recessions and rising unemployment rate,” Pamla.
He added that the rising unemployment rate was already catastrophic.
“It’s tragic that President Ramaphosa’s administration seems to be focused on implementing an economic framework of policies that do not place employment creation as a priority. The government continues to choke the economy with austerity measures, while many of our peer countries are implementing policies that support economic growth.”
The liquor industry also welcomed the government’s decision to lift the ban on alcohol sales.
The president said the resumption of the trade and distribution of alcohol would resume from midnight today.
Kurt Moore, chief executive of the SA Liquor Brand Owners Association, said the alcohol industry and business representatives entirely supported Ramaphosa’s call “to put in place the practices and forms of behaviour that we must continue to adapt for some time to come”.
Moore said industry stakeholders had met Health Minister Zweli Mkhize last week to discuss lifting the ban, as well as aspects related to enhancing the social compact between the industry, government and civil society/community.
He said during the talks, the industry acknowledged the challenges facing the government in its efforts to stem the pandemic.
The industry was now looking forward to working across the value chain to ensure the sector was able to begin to rebuild and to make its valuable contribution to the revival of the country’s economy.
“The liquor industry confirmed it is willing to ensure enhanced resources, including funds, people and time, are available to assist government in dealing with the burden on the public health-care system. It will also help ease the pressure on health-care facilities and to assist with the distribution of personal protective equipment, leveraging our extensive distribution and retail networks nationwide in support of efforts to combat the spread of Covid-19,” he said.
Virgin Active SA revealed on Sunday that it would not cut the number of members allowed in its clubs, and would be able to operate at full capacity.
Virgin said it had not yet decided on a reopening date as it was still in talks with government, even after Ramaphosa included gyms as part of the sectors that could reopen following the easing of lockdown to level 2.
“Government needs to approve our reopening protocols that have been submitted. Once they do, we’re good to go,” the company said.
It said there would be no limit of 50 on the number of people allowed in its gyms.
“This restriction is for public gatherings where social distancing cannot be managed. We are able to manage social distancing in our clubs, so we are more than positive that more than 50 people can access (our facilities) - keeping safety top of mind,” Virgin Active said.
Additional reporting by Siviwe Feketha
The Star