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.

KEY FINDINGS FOR THE WEEK

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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Business Day - 5 August 2020 by Gaylor Montmasson-Clair and Kudzabi Mataba

Read online at Business Day.

Daily Maverick - 4 August 2020 by Saul Levin (TIPS Executive Director) and Neva Makgetla (TIPS Senior Economist)

Read online at Daily Maverick

Business Day - 3 August 2020 by Neva Makgetla (TIPS Senior Economist)

Read online at Business Day.

Or read as a PDF.

Engineering News -  3 August 2020 

Read online at Engineering News.

OOSAKAnews -  29 July 2020 

Read online at OOSAKAnews.

Engineering News -  28 July 2020 

Read online at Engineering News.

The COVID-19 pandemic has dealt a body blow to the global economy, and South Africa is no exception. Recovery will not succeed, however, unless it addresses the long-standing blockages to inclusive growth. That in turn requires both immediate efforts, to minimise the economic impacts of the pandemic even while it still rages, and longer-run strategies to diversify the economy away from mining and to ensure greater equality in education, workplaces, and access to assets. These kinds of strategies inevitably require innovation and consequently entail risks, as well as running into resistance from the beneficiaries of the status quo. But South Africa will not achieve either higher growth or social cohesion unless it does more to promote a more inclusive, diversified and equitable economy.

This policy brief reviews the short- and long-run impacts of the pandemic on the economy, followed by proposals for moderating these impacts while laying the foundations for faster, more equitable and more inclusive growth after the pandemic ends.

Download a copy or read Policy Brief online.

With greenhouse gas (GHG) emissions coming to the fore of nations’ climate policy concerns, the wine industry faces a new challenge. Viniculture (grape cultivation for winemaking) is directly susceptible to climate change impacts due to grapevines being highly sensitive to the surrounding environment, such as changes in weather patterns. In addition, the industry is increasingly targeted by climate change response measures, aimed at reducing GHG emissions. Such measures are poised to significantly alter traditional methods of production. Trade-related climate change response measures, such as shifts in import-export patterns, border carbon adjustments or non-tariff barriers (such as standards), are increasingly more prevalent. Accordingly, “green protectionism”, i.e. the justification of protectionist measures under the guise of addressing climate change and other environmental goals, is also becoming more prevalent internationally.

This paper unpacks the green protectionism dynamics affecting the domestic wine value chain that stand to be a growing risk moving forward. The paper also explores the factors that make it particularly difficult and yet necessary for South African producers to adapt to this new genus of regulation.

Report produced by TIPS for the Department of Trade, Industry and Competition.

Media Article

What wine industry can do to keep its fizz amid rising threats - Business Day - 5 August 2020 by Gaylor Montmasson-Clair and Kudzabi Mataba

With greenhouse gas (GHG) emissions coming to the fore of nations’ climate policy concerns, the wine industry faces a new challenge. Viniculture (grape cultivation for winemaking) is directly susceptible to climate change impacts due to grapevines being highly sensitive to the surrounding environment, such as changes in weather patterns. In addition, the industry is increasingly targeted by climate change response measures, aimed at reducing GHG emissions. Such measures are poised to significantly alter traditional methods of production. Trade-related climate change response measures, such as shifts in import-export patterns, border carbon adjustments or non-tariff barriers (such as standards), are also increasingly more prevalent.

South Africa is the world’s sixth largest exporter of wine in volume and has not been exempt from these trade impacts. This paper unpacks the green protectionism dynamics which have increasingly impacted the domestic wine value chain and stand to be a growing risk moving forward. The paper also explores the factors that make it particularly difficult and yet necessary for South African producers to adapt to this new genus of regulation.

This report was produced by TIPS for the Department of Trade, Industry and Competition