The devastating effect of the COVID-19 pandemic on the South African economy has been so enormous and overwhelming. These adverse effects started with restricting movements of goods and services on the 27th of March 2020 when the South African President pronounced a total lockdown to mitigate the ravaging spread of COVID-19. The government’s action, which is painful but necessary for the masses’ overall health benefit, led to severe job loss. Over three million citizens lost their jobs, with women constituting two-thirds of this total number. A household survey conducted by the National Income Dynamics Study (NIDS) shows that about 50% of all South African households found it difficult to feed their family since the beginning of the outbreak of COVID-19 and during the lockdown due to food insecurity even when there is no scarcity of food. The significant effect noticed during the COVID-19 lockdown is a total loss of income or reduction in earnings due to underemployment. The South African private sector activity came to a new record low in April 2020 due to a collapse in demand for goods and services, necessitating businesses’ closure. Before that, investigation suggests that so many firms reduced their workforces, thus increasing the risk of unemployment during the lockdown.
Importation and exportation of goods and services were also disrupted during the COVID-19 pandemic, with a debilitating effect on one-third of South African businesses, according to April 2020 survey. Only about 3% of the companies in the survey were not affected by government measures instituted to prevent the spread of the coronavirus. During the pandemic, the closedown of many manufacturing companies reduced the electricity demand and, in turn, coal, thus throwing South African’s economy into further crisis. Countries such as South Africa, where mining activities are very high, were also not spared in this economic crisis due to low demand, low prices, and restrictions in importing goods and services from China and other countries. It is essential to note that South Africa, just like other African countries, depends on China for importing finished goods such as furniture, cars, electronics, and building materials. The Chinese government’s declaration of total lockdown in February 2020 had ripple economic effects on South Africa. Many small-scale businesses had to reduce the workforce or fold up. So many households that were affected find it difficult to feed their family. Sectors such as domestic workers had a taste of the bitter pill of COVID-19 lockdown. The domestic workers union confirmed that the COVID-19 lockdown had greatly impacted the industry. This is because most of their activities have now been made less important since most households who are currently under lockdown can afford to do many of these engagements themselves. The small and middle enterprises (SMEs) represent about 98% of businesses and employ between 50-60% of the South African workforce. Many SMEs were also forced to shut down during the COVID-19 pandemic, thus throwing ailing South Africa’s economy into further turbulence. This is because of the significant role played by SMEs in job creation and economic growth.
The challenges brought by the COVID-19 crisis had prompted the government and business owners to get thinking about how to leverage the crisis management skills enacted during the COVID-19 pandemic and launch a new course towards repositioning the labour force for economic recovery. The pandemic has taught business owners how to build an eye that moves with the storm, draws energy from the challenges experienced during the crises, and creates a dynamic stability platform. Many business owners are eager and clamouring to return to business immediately after the easing of the lockdown. But focusing on returning to work alone by organisations in South Africa without putting measures in place that can help deal with future emergencies such as the COVID-19 pandemic is not the best option. Because it means they are not ready to learn from the ugly experiences of COVID-19 and re-strategize on how to confront such challenges should they arise in the future. Business owners in South Africa should design the future of work by building on their organisations’ lessons and practices during the crisis. They also need to incorporate workers’ welfare into the design, and work delivery should be geared toward outputs rather than activities. This will motivate workers to be more efficient and put in their best when carrying out their duties. Almost all the sectors (both private and public) will be faced with lots of choices that require a strong will to execute in order to build a virile post-COVID-19 era. A cerebral and robust determination will help avert socio-economic crisis and reduce the means of livelihood in the future. It is necessary to begin thinking about what needs to shift in the labour ecosystem to guarantee future work in South Africa after the COVID-19 pandemic. In doing this, policymakers should be guided by long-term approaches that can be sustained in the face of the current challenges. Even though every crisis is unique in its entity and requires different and distinctive approaches, there are always good precedence and past knowledge that may help navigate the crisis created by the COVID-19 pandemic. The following adjustments need to be considered in the labour ecosystem to solidify South Africa’s future work after the COVID-19 crisis.
South African government should prioritize the welfare of its citizen over any other engagements. In doing this, measures can be put in place, such as training programmes to help unemployed individuals acquire skills that can help secure a job post-COVID-19 era. The government should also ensure that those who already have a job do not lose it while also working towards job creation to empower South African citizens to build their socio-economic status after the crisis.
There is a need to encourage small and medium-scale enterprises.
Small and medium scale enterprises need to be taken seriously if we want a positive change that will ensure more jobs after the COVID-19 pandemic. In this regard, in partnership with the South Africa Reserve Bank, the government can assist SMEs by lowering the interest rates, stabilizing the interest rates, or providing credit support for SMEs to expand further its activities that will enhance the employment of more job seekers. Also, the government can finance the private sector by either waiving tax or extending tax filing. This will eventually translate to an improvement in the socio-economic status of South African citizens.
Digitalization and use of technology.
Every business in the private and public sectors needs to readjust or re-strategise on their mode of service delivery in the face of the current reality. During the COVID-19 lockdown, many organisations were forced to shut down due to low demand for goods and services. While some businesses can still be sustained by working from home because they are technologically compliant, some cannot. This may either be due to the nature of their businesses or lack of technological initiative. The later reason is avoidable only if priority was placed on technology and digitalization. This, therefore, call for a shift in the manual type of labour to digitalization if possible. Training and retraining are needed in this regard to stand the test of time in the nearest future and ensure no job is lost even in the face of total lockdown.
Domestication of manufacturing industries
Domestication of manufacturing industries reduces reliance on importing goods and services that can be produced within the country. The South African government needs to provide an enabling environment that will allow manufacturing industries to thrive. This will reduce the number of importations of commodities into the country. By so doing, many more jobs will be generated, which will also positively affect South Africa’s economy. As it stands, South Africa still depends on China and other countries for the importation of goods and services.
Retention of the public workforce
The South African government must tread with caution never to think of retrenching the civil servants due to the economic impact of COVID-19. It is within the public domain that emergency assistance and debt relief are being given to African countries. South African government can leverage this good gesture from international financial institutions and bilateral partners to guide against job loss post-COVID-19 era.
Diversification of economy
Diversification of the economy is another way to go that will further improve the country’s economy. The advent of COVID-19 has brought to fore the importance of health and agricultural resources. The government can leverage the abundant resources to strengthen the agricultural and health sector through partnerships with development partners.
Building a robust and resilient workforce
As workers return to work, organisations owners should encourage and offer workers opportunities to grow and adapt to change based on their potentials, rather than relying on their skills or certificates. With the emergence of COVID-19, there is a need to build a resilient workforce that can adapt to constant change after the crisis. Organisations owners must train workers on how to adapt to changes during and post COVID-19.
Reduction in unemployment
There should be a strategy by the government and business owners to reduce the unemployment rate after the COVID-19 lockdown. There should be employment sites or portal systems that can easily connect job seekers with any potential businesses of their choice. This will ensure a quick and easy start for the unemployed and significantly reduce unemployment after the COVID-19 pandemic.
If South Africa desires to revamp its economy after the COVID-19 pandemic, then massive infrastructure investment is inevitable. Most countries that have experienced one economic crisis at some point or the other always invest heavily in infrastructural development to reduce their financial hardship. This is usually accomplished after critical review and analysis to know which infrastructural development is most suitable and relevant to tackle the existing challenges. Such infrastructural development must bring relief to its citizens and boost the hitherto paralysed economy.
Worker’s welfarism to compensate for over dedication.
The post-COVID-19 era will require all SMEs to redouble their efforts to recover some of the lost grounds. In doing this, employees will be required to work harder and, in some cases, do overtime. To compensate for all this dedication and commitment, workers should be highly motivated, especially when their contributions to work are reflected in the output produced. People love to contribute to their organisations more when they know their unique talents, strengths, and contributions will be rewarded by their organisations. This will further boost the socio-economic status of the workforce. Employers can also develop platforms and avenues such as surveys and a data-driven approach by which they can better understand worker’s unique qualities, needs, challenges, and interests. In addition to attending to their workers’ welfare, business owners need to strengthen the connection between the sense of their workers’ belonging and administrative performance. They must also enable a more profound connection by drawing visible linkages as to how their workers contribute and impact the organisation and society.
In conclusion, COVID-19 will come and go, but the effect may linger on for a while if not properly managed. Almost every sector of society is affected one way or another. The most challenging of these is job security after the COVID-19 pandemic. Efforts must be in top gear to gradually normalize and stabilize the country’s socio-economic activities. Both government and well-meaning individuals should work together to achieve this noble goal. More efforts should be geared at partnering with international financing institutions to cushion the pains further and make life meaningful once again to those affected. The government should implement strategies and policies to sustain the economy by all means possible. This will ensure a gradual but effective recovery of the South African economy.
Dr. Lizzy Oluwatoyin Ofusori is a postdoctoral research fellow at the School of Management, IT and Public Governance, University of KwaZulu Natal, Durban. She writes in her capacity.