- Business confidence levels have rebounded from a low in May, but are still below last year’s levels.
- The South African Chamber of Commerce and Industry has called for more of the economy to be opened up, saying the benefits of the lockdown to public health are “not clear”.
- South Africa has over 550 000 confirmed cases of Covid-19, making it the fifth worst affected country in terms of infections, behind the US, Brazil, India and Russia.
Government should lean towards reopening more of the economy as the nationwide lockdown has had a a “devastating” impact on SA’s business environment, while its benefit to public health was “not clear”, the South African Chamber of Commerce and Industry has said.
SACCI on Wednesday released its business confidence figures for July, May and June.
“The exponential rise in Covid 19 positive cases has catapulted South Africa to be in the top 5 countries in the world and we have the highest number of positive cases of all of African countries combined,” the chamber said.
“This may well mean that whilst the imposed lock down has had a devastating effect on the economy and livelihoods, the benefit to the public health care is not as clear, given the exponential rise in positive cases, hospital admissions and mortality numbers in this period,”.
South Africa has over 550 000 confirmed cases of Covid-19, making it the fifth worst affected country in terms of infections, behind the US, Brazil, India and Russia. SA has suffered 10 751 Covid-19-related deaths.
Business confidence levels dropped to a seven-month low in March, at 89.9 points, and deteriorated even further to 77.8 in April before hitting a record low of 70.1 in May.
Confidence levels rebounded to 81.4 in June and improved slightly to 82.8 in July. But July’s figures are still nearly 10 points lower than the same month last year.
Lower manufacturing output, declines in imports and new vehicle sales, and decreased retail sales and disruptions to construction activity impacted July’s reading, said SACCI
The chamber said the government should consider the “deleterious” impact of the lockdown on business, as the domestic economy was already at a vulnerable stage prior to the imposition of the nationwide lockdown in late March.
“The balance should rather lean towards opening up activity than following a rigid approach that adds little to mitigating the pandemic,” it said.
SACCI also said government should prioritise testing employees.
“This strategy would have ensured that those returning to work would not be going to unsafe workplaces, and neither would they as individuals, be unintended asymptomatic spreaders at the workplace.”
According to SACCI, targeting testing would have aided the “rapid and sustainable” reopening of the economy and helped mitigate the impact of the virus.
Corruption damaging recovery
The chamber said that recent reports on corruption related to Covid-19 procurement had the effect of damaging the country’s recovery.
“In announcing the Covid-19 relief measures, the President had stated that measures would be put in place to ensure that public finances would not be irregularly spent. This promise has not been fulfilled and raises the issue of credibility.”
While President Cyril Ramaphosa has appointed a Cabinet committee to deal with allegations of tender corruption, SACCI is not convinced that it is an appropriate solution.
“Perhaps the time has come for government to pause, reassess and re-evaluate its own cabinet resource capabilities, by enquiring whether some of its cabinet committees have the required level of competence, grit and experience to handle the big tasks,” it said.