South African business leaders lauded the government’s plan to substantially ease a nationwide lockdown that’s crippled the economy, even as the number of the coronavirus cases grows exponentially.
An additional eight million people will be allowed to return to work when the national disease-alert level drops one notch from 1 June, President Cyril Ramaphosa announced on Sunday night. His administration abandoned previous plans to maintain more stringent restrictions in several cities and towns hardest hit by the disease, but cautioned it’s still an option.
While other nations have opened up after the pandemic peaked, South Africa is relaxing its rules when cases are still on an upward trajectory — a third of its 22 583 infections were diagnosed in the past week alone. But with unemployment and business closures skyrocketing and the central bank anticipating a 7% economic contraction this year, Ramaphosa acknowledged that maintaining the lockdown had become unsustainable.
“We believe that the decision announced by the president is best for the country given where we find ourselves now,” said Sipho Pityana, the president of lobby group Business Unity South Africa. “It is time for many of us to return to work, but to do so in as safe way as possible.”
The rand advanced as much as 0.5% against the dollar on Monday, and was 0.1% stronger at R17.63 at 12.11pm in Johannesburg. It was just one of three emerging market currencies to post gains against the greenback.
South Africa’s economy went into lockdown on 27 March, with only grocers, pharmacies and suppliers of essential services allowed to keep operating. The rules were relaxed on 1 May, but many businesses have remained partially or completely shut. Ramaphosa first announced plans for a further easing of restrictions on 13 May, but gave few details.
‘Important and welcome’
While the government had previously been accused of taking arbitrary decisions, its response now appears to be based on a rational analysis of the available options to protect the economy and fight the pandemic, said Busi Mavuso, CEO of lobby group Business Leadership South Africa.
Ramaphosa has “shown great leadership in resetting the course of government’s response when it has become clear that it is needed”, she said in her weekly newsletter. “The shift to level 3 next week is important and welcome. It will allow more of the economy to reopen and for people to earn a living.”
Under the new rules, limited alcohol sales for home consumption will be allowed to resume, while a night-time curfew and a restriction on when people can exercise will be dropped. Tobacco sales will remain banned because of the health risks associated with smoking. Eat-in restaurants, bars, sporting venues, places of worship and conference centres will also be barred from reopening.
While the reopening of the economy is welcome, the announcement was six weeks overdue, said John Steenhuisen, the acting leader of the Democratic Alliance.
“There was no rational justification to extend the hard lockdown beyond the initial three weeks, and this extension has now caused irreparable damage to our economy,” he said. “The resulting hardship and suffering — and ultimately, the premature deaths of South African citizens due to this” could have been avoided, he said. — Reported by Mike Cohen, (c) 2020 Bloomberg LP