South Africa is hurting badly

Remgro released its financial results for the year ended 30 June 2020, which shows the devastation of the COVID-19 pandemic and lockdown on the company.

Total headline earnings per share were down by 61.3% and headline earnings per share from continuing operations declined by 68.7%.

With a diverse portfolio of companies, Remgro is in a good position to assess the impact of the lockdown on the South African economy.

Remgro said in a press statement the pandemic and lockdown “have brought desperation and devastation upon millions”.

“In South Africa, lives and livelihoods have been lost, with household finances decimated and many going hungry in large parts of the country,” it said.

In its results presentation, Remgro highlighted that the initial level 5 lockdown brought the local economy to a near standstill.

The ban on alcohol and closure of restaurants were two examples of where entire industries were prohibited from operating.

Even after some of the restrictions were lifted, many industries like tourism were still struggling to operate.

The impact of the lockdown rules on the South African economy was immediate and devastating.

The country’s gross domestic product (GDP) dropped by 51% in the second quarter of the year, reflecting the immense damage done to the economy by the lockdown.

Stats SA’s latest Quarterly Labour Force Survey further revealed that the number of employed persons decreased by 2.2 million to 14.1 million.

This unprecedented change is the largest quarter one to quarter two decline since the survey began in 2008.

The FNB/BER Consumer Confidence Index (CCI) has also shown that the pandemic and related economic restrictions delivered a profound blow to consumers’ willingness and ability to spend.

The CCI plummeted from an already depressed level of -9 in the first quarter to a shocking -33 in the second quarter.

Remgro published three graphs, reproduced below, which clearly illustrates the impact of the lockdown on South Africa’s economy.


Real GDP decline


Unemployment


Consumer confidence


Now read: The lockdown has crushed IT jobs in South Africa, but ecommerce is booming

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South Africa is hurting badly