Businesses calling for urgent end to South Africa’s lockdown

Many prominent South African business executives are calling for the lockdown to end to save the economy and people’s lives.

The lockdown has already claimed many businesses, including Time Freight, Rebel Tech, Associated Media Publishing, and Caxton Magazines.

Many prominent South African companies have also applied for business rescue, including Edcon and Comair.

These companies were impacted by the strict lockdown regulations which made it difficult, or in some cases impossible, to operate.

Economist Mike Schussler said while the slightly-relaxed level 4 rules had some positive economic impact, it is not as significant as many people think.

He said the BankservAfrica point-of-sale data shows that the number of transactions increased by 20% between level 5 and level 4, but is still well below normal levels.

Schussler said the country is looking at a very desperate GDP situation, which is aggravated by the absence of sin-tax collections.

He highlighted that the economic impact of the lockdown will also lead to the loss of lives. “It is not the economy versus lives, but lives versus lives,” Schussler said.

Nick Hudson from Pandemic Data and Analytics (Panda) echoed Schussler views. He warned the COVID-19 lockdown may cause 29-times more deaths in the long run than the virus.

Businesses calling for urgent end to South Africa’s lockdown

Many business executives are now calling for the end of the lockdown, including Allan Gray CIO Andrew Lapping and Accelerate Cape Town CEO Ryan Ravens.

Speaking to CNBC Africa, Lapping said even with the lockdown it is not possible to stop the spread of the virus.

He said the spread will continue for the next few months until it hits a peak. This gives the government a choice:

  • They can let the people die from COVID-19.
  • They can let the same number of people die from COVID-19 and destroy the economy.

“We are urging the government to look at the big picture and see just how many lives are lost through poverty and hardship which is caused by the lockdown,” he said.

Ravens agreed with Lapping, saying the lockdown will not eradicate the virus and no country can maintain a lockdown for 18 months until there is a vaccine.

“We already know we have to open up the economy while the virus is still at play,” said Ravens.

He said the country is losing money daily with the extended lockdown, without any clear guidance on moving out of it.

Lapping added that the government has given no reason for the extended lockdown and what it wants to achieve.

The first lockdown, he said, was clearly aimed at preparing hospitals for the expected influx of COVID-19 cases. This is now complete.

“There has subsequently been no reason given for carrying on the lockdown. No one knows what the reason is behind the government’s thinking,” he said.

Additionally, Ravens said social distancing is simply not possible in disadvantaged communities.

“You have to question, why are we continuing to destroy the economy when we know that social distancing is already not happening,” he said.

Interview with Andrew Lapping and Ryan Ravens

Now read: Lockdown rules – Level 4 versus Level 3

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Businesses calling for urgent end to South Africa’s lockdown