Authors: Jasmine Chin and Aryaman Belgaumkar
Region Head: Hu Si Ying
Editor: Praharsh Mehrotra
Illustration by Chen Hsuan Ju
Since COVID-19 caught the world off-guard at the start of the year, continents have struggled to keep the pandemic subdued – Africa included. However, research by the European Centre for Disease Prevention and Control shows that continental Africa is only now experiencing the rise of the first wave of infections (Harding, 2020) and the dreaded second wave has not arrived on its shores, indicating that the worst is yet to come.
This long-drawn-out pandemic has taken a toll on vulnerable communities and the informal sectors in many African countries. Even South Africa, the third largest economy on the continent (U.S.News, 2019), was not immune to the effects of COVID-19. The southernmost African state ranks 9th on the World Health Organisation’s (WHO) COVID-19 dashboard, with over 650 thousand confirmed cases at the time of writing (WHO, 2020).
With this staggering number of cases, South Africa has had to implement lockdown measures since March this year to contain the virus. This has led to unintended economic consequences for its most vulnerable populations, which we will discuss in detail below. This article will conclude by addressing some of our policy recommendations ahead of a likely incoming second wave.
National lockdown and trade interruptions
Large-scale lockdowns can threaten the integrity of a country’s supply chains and exacerbate any existing food shortage for the people. In March this year, South Africa imposed a strict nation-wide lockdown, closing its borders in a bid to stem the spread of COVID-19 (BBC, 2020).
This move has not directly restricted the movement of essential goods, which are defined as food, cleaning and hygiene products, fuel, medical supplies and basic goods in the Disaster Management Act of 2002, into the country. However, it has aggravated the delays faced by cargo at the ports, as well as in the transportation chain, adding “risks, costs and pressures” to the supply chains (Naude, 2020). As an importer of food grains (Esterhuizen, 2020), a hindrance to the proper functioning of South Africa’s supply chains can lead to acute food insecurity for its people, especially during the COVID-19 pandemic.
The people living in South Africa mainly consume cornmeal, wheat and rice, yet the country cannot produce its own rice due to a mismatch in environmental conditions required to do so (Esterhuizen, 2020). As the people can substitute rice for other types of grains, the price of rice is relatively elastic (Esterhuizen, 2020). Suppliers of rice would need to keep the price of their products low and constant in order to attract price-sensitive customers. This might not be an economically feasible course of action for smaller retailers who have to absorb the increases in the cost of rice as a result of supply chain delays and disruptions. Should these retailers stop importing rice due high costs, the supply of rice would fall and potentially lead to a shortage of the grain in South Africa.
Overlooking micro-entrepreneurs in the informal sector
The nation-wide lockdown has disproportionately impacted small businesses operating within the informal sector, which provides roughly an additional 2 million jobs in South Africa (Khambule, 2020). These independent businesses are often undocumented and thus likely to be excluded from fiscal support dished out by the government to businesses of the formal sector of the economy (Lashitew, 2020). This very fact puts them on an uneven playing field with formal businesses, especially during COVID-19, where governmental support is extremely important for the survival of companies.
People who work in South Africa's informal economy usually take up jobs as "food vendors, waste pickers, market traders and domestic workers" (Khambule, 2020). Many of these workers were unable to go to work at the start of the nation-wide lockdown as legislation prohibited the opening of "any place not involved in the provision of an essential good or service" (Disaster Management Act, 2002). Furthermore, shops that are committed to selling essential items during the lockdown were not allowed to sell anything else (Disaster Management Act, 2002). This could curtail the earnings of small informal sector businesses and workers, especially if they run a diversified business.
After public criticism of the government's (unintentionally) unfair restrictions on the informal sector, lockdown regulations were revised to allow the operation of some informal businesses, though they would have to bear the costs of adhering to COVID-19 safety measures, such as routine disinfection costs (Khambule, 2020). Hence, small entrepreneurs in the informal economy lose out as they are easily overlooked by the government in aid provision during COVID-19.
Moving Forward: Can localised Covid-19 policy responses help South Africa increase economic activity responsibly?
It is crucial to recognize the essential role localised policy responses will play in the mitigation of the spread of the coronavirus. The Health Ministry’s classification of districts, on the basis of number of Covid-19 cases, into three categories: vigilance, emerging hotspots and hotspots has helped the government pursue localised transmission curtailment strategies while continuing to move forward on the path of a phased and gradual reopening of the economy (Govender, 2020). However, localised policy responses should not be restricted to the realm of pandemic management which includes making decisions about testing and surveillance. It is essential that the district-level data be made readily available for taking district-level decisions about the reopening of schools, workplaces and removal of restrictions on public and social gatherings (Kadt, 2020). It is evident that nationwide Covid-19 policies such as nationwide lockdowns are no longer economically viable for South Africa and it remains a move of last resort for the government.
Protecting the most socio-economically vulnerable segments of the population also demands region specific data. Geospatial data pertaining to income vulnerabilities can help pinpoint regions where the density of the most vulnerable populations is high and targeted intervention can be carried out by the provincial governments. Unfortunately, the last time a census was conducted was in 2011. Sample surveys in rapidly changing urban areas through digital interface and telephonic interviews can provide important information about the severity of the economic pressures placed on the most vulnerable segments of South Africa’s population (Kadt, 2020).
Social Distancing: An unrealistic expectation?
Social distancing is proving to be impractical for many in South Africa. Densely populated townships and neighbourhoods make it impossible for many people to practice social distancing on a daily basis. These living realities make it hard for many to comply with the harsh restrictions imposed during lockdowns or periods of restricted movement. It is necessary to revise rules and regulations keeping in mind the living conditions of South Africa’s most poor populations. A harsh imposition of rules and laws that do not take their living situation into account can only lead to social unrest and a wilful disregard for public law and order amongst the most vulnerable segments of society. While the government has announced that it will offer an unemployment grant of ZAR 350 (USD 15) per month and this measure is laudable, it is necessary that the government is also more accommodative of the severe daily challenges South Africa’s poor face everyday in these unprecedented times (Maringira, 2020).
The South African government’s initial response to Covid-19 was well intentioned and aimed to significantly mitigate the spread of Covid-19. However, the replication of the Western approach to manage the spread of the virus has proven to be highly ineffective and dangerous for the most vulnerable populations of South Africa. Covid-19 has also illuminated many of the deep rooted socio-economic issues such as income inequality that require immediate attention. Localised covid-19 policies such as regional lockdowns and regional decisions about reopening of the economy based on district-level data will help the South African government reopen the economy gradually and responsibly. It is necessary to understand that the pandemic is having a widely varying impact across different regions in South Africa. A one-size fits all approach will fail, has failed and will continue to fail unless the government strengthens provincial and district level decision making and ensures that the national policy response is well integrated with the regional response.
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