Covid-19 And Its Socio-Economic Impacts in South Africa: The Role Of The Government In Sharpening A New Post-Crisis Society

By: Dr. Adebimpe Ofusori

COVID-19 originated from China in December 2019 and began to spread to other parts of the world including African countries through the movement of persons and goods in the beginning of the year 2020. The economy of China finally came to a standstill in the month of February 2020 due to this ravaging pandemic which necessitated total lockdown. It is worth noting that many African countries including South Africa depend on China being the leading manufacturer of different types of products for the importation of some major commodities for the survival of its economy. For instance, China is the leading manufacturers of cars and highest quality designer bags while South Africa, due to high demand, imports some of these products from China. Other products imported from China include but not limited to wedding dresses, furniture, electronics, machinery and building materials. It is well documented by United Nations COMTRADE that South Africa imports goods to a tune of 15.22 Billion dollars from China. The halt in Chinese economy led to spill over consequences in South Africa. Also, South African economy which some expert described as ailing according to DW.COM, began to shrink following the commencement of total lockdown declared by the South African President on 27^th March, 2020. The advent of COVID-19 has indeed inflicted a lot of socio-economic trauma on South Africans. This unbearable consequences continue to increase with continuous increment in the number of confirmed cases. As at the time of writing, a total number of confirmed cases has risen above 500,000. In order to mitigate the spread of corona virus, measures were put in place globally to ensure social distancing and community transmission. Some of these measures includes but not limited to regular washing of hands and the use of hand sanitizer and other hygienic items. These measures were challenging for some informal settlements in South Africa which constitute about 13% of all households as a result of lack of running water and limited financial capacity. The compulsory use of face masks and other hygienic materials also added to the socioeconomic problems of South Africans as the prices of these commodities were significantly inflated by some of the production and distribution companies. A typical example was that of MATUS, a company referred by Competition Commission of South Africa to the Competition Tribunal for it to sign off on a penalty agreement after the inflation of face-mask prices. The company had to make commitment to ensure its gross profit margins for essential products would not be escalated above what was applicable before the advent of COVID-19.

Majority of South Africans depend on public health care facilities which become overstretched during COVID-19 pandemic thus necessitating a lot to resort to private health care system which is only affordable to the rich in the society. This inflicted financial strain on the purses of low and middle income earners. Also, during this pandemic according to Medical Brief, lots of South Africans stockpiled their homes with chloroquine in anticipation of COVID-19 infection thus depriving patients in dire need of the product from having access to it. The South Africa’s medicines regulator had to intervened and warn consumers against this practice as no evidence has proved that the drug can combats coronavirus.  The pregnant women were also not left out in this crisis as some had to change their social and economic life style to adapt with the prevailing reality of COVID-19. Some had to scuttle through their jobs while also battling with the fear and anxiety of not getting infected with the virus. In some cases, pregnant women prefer the private health system because of overcrowding and quick attention but not without financial consequence.

Many other sectors such as the domestic workers which constitute about 8% of the total work force in South Africa also had a bit of the socioeconomic challenges during this pandemic period due to total lockdown. This was the reason why the domestic workers union lamented on the effects of COVID-19 on its members because the hitherto important task they promote has been played down during total lockdown. The commercial (interprovincial) transport and taxi drivers also had a share in the aftermath of the lockdown. The South African President Cyril Ramaphosa on 15^th of March 2020 stated that ‘urgent and drastic’ measures were needed to combat the spread of corona virus. This led to restrictions of certain rights and freedom within South Africa by Dr Nkosazana Dlamini Zuma, the Minister of Cooperative Governance and Traditional Affairs. During this period, movements of persons and goods were restricted before the declaration of total lockdown on 27^th of March. This pronouncements had a negative effect on the financial status and well-being of the drivers with spill over consequences on their family members and other dependents. As a result of the lockdown geared at ensuring physical distancing, some non-essential services were forced to a halt because of the decline in the demand for such services. This is particularly true for establishments such as theater, restaurants, saloon/shop, sporting events and hotels. It is worthy of note that South Africa is one of the few countries in the world with the most stringent measure during COVID-19 lockdown in view of the high incidence rate of other underlying diseases such as tuberculosis, HIV/AIDS and preeclampsia which experts say can aggravate corona virus infection.  The country therefore had to choose positive health effects of lockdowns against negative economic consequences which is the most difficult but reasonable option. During the lockdown, small and medium-sized enterprises had to be forced to shut down thus, leading to socioeconomic crisis within South Africa. The small and medium-sized enterprises employed between 50-60% of the entire workforce in all sector within South Africa and also contribute 39% of the GDP. This shows that small and medium-sized enterprises is a critical sector that drives the economy of the country. International trade and investment were also affected as many factories associated with such businesses had to shut down voluntarily to stem the spread of the virus.  The shutdown of many manufacturing companies led to the reduction in the demand for electricity which in turn led to the low demand for coal; all these further plunged the ailing economy into crisis. This economic crisis had a financial toll on the income of many households thereby leading to food insecurity. About 55% of the transient poor and 57% of the vulnerable in the society are employed according to UN report on Socio-economic Impact Assessment of COVID-19 in South Africa. A drop in the employment rate during COVID-19 lockdown led to a significant reduction in the socioeconomic status of these set of people. This resulted to the reluctant but compulsory adjustment to the socioeconomic reality by many households in South Africa. For those who had a total collapse in their earnings and cannot even cope during the period of lockdown, the South African government intervened in this scenario through income transfer (social grant) which have substantially alleviated the suffering and also support the income of many households.  This social grant tagged as The Special COVID-19 Social Relief of Distress commenced from the month May until October with a total amount of R350 per month.

What then is the role of the government in sharpening a new post-crisis society?

The South African government have contributed immensely towards alleviating the socioeconomic imparts of COVID-19 on the economy, however more measures are needed to be put in place to sharpen a new post crisis society and also serve as guide in case of future occurrences. These measures require bold, determined, well focused and coordinated response such as:

• Awareness and support for small and medium-sized enterprises

There has been support from private sectors and government for small scale businesses in South Africa but the amazing thing is that many of the business owners do not have access to this information. Intensive awareness must be created to sensitize every sector of the support arrangement. Also soft loans should be provided for these enterprise to strengthen their businesses and help them bounce back after the pandemic.

• Provision of more medical equipments and health care facilities

The government should help in the provision of more medical equipments that can cater for large number of people in the health sectors. More manufacturing companies such as those relevant in the manufacturing of PPE, sophisticated equipments such as ventilators and other medical equipments should be encouraged and granted unlimited permission and necessary support to operate freely.

• Provision of proper accommodation for the vulnerable and less privileged

There has been fear of the spread of corona virus in overcrowded informal settlement within the country where social distancing is almost impossible. This set of people share basic toilet facilities and in some cases, lack access to basic amenities such as safe drinking water and medical facilities within their settlements thereby promoting poor sanitation. Underlying ailments such as diabetes, TB and HIV/AIDS are common in some of these people and can aggravate the complications associated with COVID-19 if infected. Government can assist in providing comfortable accommodation with basic amenities in order to ensure proper hygienic environment.

• Research grants for the University sectors

Universities in South Africa has contributed a great deal to research and development innovations. Some assisted in the production of medical products and protective equipments against COVID-19. There has been collaboration by University of Western Cape and Stellenbosch to produce Sars-COV-2 strains while the Biopharming Research Unit of University of Cape Town produced antigens and antibodies required for COVID-19 test kits. There has been provisions for research grants by the government to implement COVID-19 related projects but more of such grants are still needed to better understand the science of COVID-19 and also develop new drugs and vaccine needed to combat this novel virus. Intellectual discussions and researches aimed at fighting against similar pandemic in future should be encouraged by the government.

• Improvement in surveillance equipments

The emergence of corona virus has brought about the introduction of new surveillance equipments needed for contact tracing. Such equipments help in tracking and monitoring citizens who might have been exposed to COVID-19 in order to curb the spread of the virus. There should be improvement on these surveillance equipments by the government in terms of computerised innovations so as to ease the problems associated with contact tracing in the nearest future.

• Social grants

The government of South African has done well by the introduction of social grant for the vulnerable in the society. This good gesture should be sustained post COVID-19 lockdown and also think of the possibility of increasing the amount allocated for social grants. This will ensure a gradual adjustment for these sets of people until the economy has fully recovered.

• The South African Reserve Bank

The South African government through the South African Reserve Bank can assist domestic financial markets through the provision of asset purchase programs and credit support in order to ensure sustainability.

• Proper monitoring of food parcels and relief funds

There must be proper monitoring of the food parcels, relief funds and donations by the government and private companies to various sectors in the country. According to the data by Department of Social Development (DSD), only about 12% of food parcels have reached those who needed them. Also, there has been complains and fear that the relief funds released to support various sectors in the country especially small business owners, do not get down to the beneficiaries. Women who constitute two-thirds of about three million people who lost their jobs during the pandemic should be of priority while also working alongside informal workers within the society.

In conclusion, lots of lessons has been learnt from the outbreak of COVID-19 in South Africa. As at now, over 10,000 people have lost their lives, and hundreds of thousands infected. Life after the pandemic may not be the same as it was before the emergence of the virus. However, South Africa government is working very hard to alleviate the impact of COVID-19 on the economy of the country and also preparing the society for a new post-crisis era.  In respect of this, every sector of the society is expected to cooperate, embrace and support the various initiatives and recovery strategies that will be adopted by the government in order to ensure a gradually but speedy recovery process.

Adebimpe Ofusori is a researcher at the University of KwaZulu Natal and writes in her personal capacity