TIPS Tracker: The economy and the pandemic Week 25-31 May 2020

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.


On the pandemic

  • The rate of growth in cases surged in KwaZulu Natal and Gauteng, although it slowed in the Western Cape. If the rate of growth outside of the Western Cape is not contained, the number of cases there will double in two weeks – about a week sooner than if the rate of growth had remained the same as last week.
  • Government’s decision to define Level 3 as opening most of the economy plus churches and schools represented a fundamental shift in approach and responsibility. It required individuals and groups to manage risk rather than adhering to regulations banning hazardous activities. To succeed, this strategy must combine measures to ensure that people have the information and resources they need for sound decision-making with stringent and swift management of outbreaks. Government did not, however, move to substantially scale-up programmes and expertise to help individuals understand risks and change their behaviour. Nonetheless, it appeared increasingly willing to permit even highly risky activities to reopen in the near future.
  • New studies suggested that COVID-19 is disproportionately spread through a few super-spreading events, typically when large numbers are in fairly crowded spaces for a significant period. By extension, the biggest risks under Level 3 arise from public transport, mines, churches, and spaces where significant groups meet at work, including during breaks.

On the economy

  • Under Level 3, which starts on 1 June, all businesses except for personal services, recreation and sit-down restaurants will be permitted to reopen. That means that around 90% of workers could return to work, although employers must still have people work from home when possible.
  • The third week of Level 4 showed only a limited increase in economic activity but a surge in work-related hotspots, notably in the mines but also in health and the police as well as some retail chains and factories. Most industries did not, however, appear to have a defined structure to identify and mitigate risk factors as they emerged.
  • Significant differences emerged in the effectiveness of the various funds established to support workers, businesses and households during the lockdown. The programmes that built on existing programmes have disbursed billions of funds. In contrast, when disbursements required new systems to identify and appraise applicants, relatively few applicants have received any support.

Download a copy or read the Tracker online

Download a copy or read the Tracker online.