TIPS Tracker: The economy and the pandemic 27 July - 9 August 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

  • South Africa appears to have succeeded in cutting the transmission of COVID-19 sharply over the past month, although reported new cases per 100 000 are still far higher than in early June. Known active cases declined 45% from their peak in mid-July through 9 August.
  • The reasons for the decline are not obvious. The critical factor has likely been the willingness of millions to wear masks and socially distance as far as possible, reinforced by government action to discourage high-risk activities in mid-July.
  • Despite the improvement, six out of nine provinces still reported more than 10 new cases per 100 000 residents as of 8 August. According to recommendations by the Harvard Global Health Institute and the Safra Centre for Ethics, that means they should maintain strict limits on social and recreational gatherings. An OECD study found that if South Africa permits another peak in infections this year, it will shave 2% off the GDP forecast for 2020 and 2021.

On the economy

  • The available data suggest that economic growth is still recovering slowly.
  • The pandemic has had a particularly harsh impact on women in South Africa, as internationally. They are more likely to work in jobs that directly serve the public, where the risks of both infection and job losses are highest. They are also less likely to have paid work at all, and so benefit less from relief efforts tied to employment and income. And they face increased domestic violence during the lockdown. The increase in social grants goes only a small way to offsetting these disadvantages.
  • The social and political stresses resulting from the long-running pandemic have begun to emerge in rising protests as well as the corrosive discourse on corruption in procurement. Nonetheless, proposals for recovery from economists and business organisations continue to focus on long-run demands rather than ways to cushion the immediate economic impacts of the pandemic. Opportunities include setting up systems to limit workplace outbreaks; developing a just transition for industries that cannot open safely in the short run (notably entertainment venues, tourism and liquor stores) while identifying new opportunities; expanding public employment and other programmes to relieve the devastation wrought on poor communities; and finding more progressive ways to fund state programmes.

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