Online shops will continue to be restricted in what they are allowed to sell in South Africa, even when the country begins to relax its COVID-19 lockdown regulations on 1 May 2020.
Minister for Trade and Industry Ebrahim Patel said that ecommerce will continue to operate under restrictions, as is the case with South Africa’s traditional retail sector, due to concerns over fair competition.
“If we open up any one category, let’s say ecommerce, unavoidably there’s enormous pressure to do the same for physical stores, or spaza shops for informal traders, so that there’s fair competition platform,” Patel stated.
“We need to make sure that we have a system in place that has wide society support.”
Following public backlash over the statement, the Alert Level 4 regulations gazetted by the Minister of Cooperative Governance, Nkosazana Dlamini-Zuma, contained a special provision for the ecommerce sector:
Directions may permit the incremental expansion of e-Commerce, taking into account the need to limit the extent of movement on the road, contact between people, law-enforcement challenges and the impact on other businesses.
Criteria for re-opening businesses
While the issue of fairness was clearly an important one for the Department of Trade and Industry, it curiously did not feature in Minister Patel’s original list of criteria for determining what regulations should be imposed on various sectors of the economy.
Patel stated that they took four factors into consideration to determine whether a particular factory, shop, or office is able to open.
- Risk of transmission of the virus. This also includes the number of people who have to travel to work, and the number of people who have to travel to the shop.
- Expected impact of a continued full lockdown on the sector.
- Contribution and the economic linkage of every sector to the broader economy – contribution to the GDP, the number of jobs, the multiplier effect on the economy, export earnings, supply chain linkages, and South Africa’s industrial policy goals.
- Promotion of community well-being. Protecting the livelihoods of the most vulnerable people of our society.
The problem of fairness as a criteria
Nowhere in the criteria that Patel set out did he mention fair competition, or fairness in general. And rightly so.
We can’t plead with the coronavirus for equitable treatment. It is utterly unimpressed by our personal circumstances or life story.
Whether you are a single mother, migrant worker, or stockbroker, it is indiscriminate about who it infects. If you give it an opportunity, it will take it.
This creates an inherently unfair situation. Some people will be at greater risk than others because of circumstances that may be out of their control.
It isn’t fair that countries like South Korea and Taiwan have the infrastructure to deal with their coronavirus epidemics without instituting strict lockdowns, whereas in South Africa we are constrained by the socio-economics of our country and the limitations of our public healthcare.
Similarly, any decision about whether to block a business from operating or have an industry operate under severe restrictions due to the coronavirus will be inherently unfair.
It is not fair to the people who work for alcohol producers or tobacco companies that their employers have been unable to trade, putting their salaries at risk.
It is not fair to sales people who work on commission that they can’t make sales.
It is not fair to professional athletes that they can’t play, or to actors and musicians that they can’t perform, or to waiters that they can’t earn tips.
What is fair, it seems, has not been a consideration until now. Only what is necessary.
Specifically, what government has believed is necessary to protect our healthcare system and save lives.
A word of thanks
Credit must be given where it is due, though. I have been critical of the government and the ruling party when they have performed poorly.
It is only right to thank the government for the decisive way in which it has responded to the COVID-19 crisis.
This in no way is intended to take away from the possible disaster that has been averted in South Africa due to the swift action from our leaders.
No one envies the difficult decisions leaders have to make during this time. It is not easy to balance saving lives with the need for economic activity, education, and risk of social unrest against the effects of COVID-19.
What South Africans are asking for, however, is consistency in the decision making.
Further relaxing the restrictions on ecommerce doesn’t only have to apply to well-known websites in the formal part of the sector.
Informal traders can be allowed to take orders via WhatsApp, for example, and deliver goods so long as they adhere to the hygiene standards laid down in regulations.
Everything that does not represent a risk to our healthcare system and front-line workers should be allowed. What could be more fair than that?
Applying department criteria to ecommerce
As a thought experiment, let’s apply the department’s four criteria for deciding whether to reopen a business or sector to the ecommerce sector.
|Risk of transmission of the virus||Low, provided that basic hygiene procedures are enforced, similar to those already in place at physical stores. No human interaction is needed to make a purchase, or to accept a delivery.|
|Expected impact of a continued full lockdown on the sector||Severe, like many other industries.|
|Contribution and the economic linkage of every sector to the broader economy||Linked to the logistics industry, and producers and importers of currently banned products. Time Freight has already indicated that it might close its doors.|
|Promotion of community well-being||Will help protect the jobs of warehouse workers, delivery drivers, customer support staff. Will help people get goods that are essential to them, but which are not included on the essential goods lists.|
This is an opinion piece.