National and city-based approaches to managing the novel coronavirus in South Africa
Abimbola Windapo is Associate Professor at the Department of Construction Economics and Management, University of Cape Town
The coronavirus pandemic has resulted in massive disruption of supply chains, the bursting of financial bubbles, and could very well lead the world into another great depression. These economic factors compounded with the obvious health ones affect how cities will respond.
This blog discusses how the coronavirus is being dealt with in South Africa and how the city of Cape Town is managing the pandemic.
The South African government mandated a lockdown based on a Disaster Management Act promulgated to address the COVID-19 pandemic. President Cyril Ramaphosa announced on March 23 that a nationwide lockdown would be initiated on March 27 and would last for three weeks. This was later extended by two weeks, after risk-adjusted levels were raised from 1 to 5 (where 1 is normal, and 5 signifies high virus spread). South Africa was at Level 3 as of June 22, 2020. The lockdown conditions are enforced by the South African National Defense Force (SANDF), and the South African Police Service (SAPS). Only health workers, traffic officers, essential services (like the agricultural sector) and emergency personnel (Davis, 2020).
These steps taken by the government of South Africa has been effective in curbing the rate of infections and flattening the curve of the number of infections. The impact on the economy in sectors such as construction, has however been remarkable. The construction output growth forecast for South Africa’s construction output has been revised to a negative -4.1%. Several construction workers and professionals were placed on unpaid leave in an industry that employs more than 1.4 million people. This represents loss of livelihoods. In addition, in enforcement, officials of both agencies have been observed to act with unnecessary force, beating, humiliating and shooting civilians (Harding, 2020). There have thus been social and economic consequences.
Curbing the Economic Effects at the National Level
To curb the economic effects of the lockdown, the government restructured the debt, or in some cases increased funding for small businesses, since they were the hardest hit. It is necessary to note that SA’s informal economy is much smaller than other sub-Saharan African economies. The informal economy contributes about 18% of employment compared with 50% in Ethiopia, 65% in Nigeria, 90% in Ghana and Mali respectively (Forbes Africa, 2019). This means that employed people who are not deemed essential will not face immediate strain as their income is not dependent on daily earnings.
Perhaps this explains why there are no plans for the informal economy as of now; priority is being given to businesses licensed by municipalities (Davis, 2020). The Unemployment Insurance Fund (UIF), which is worth $2.2 billion (R40 billion) (Cohen & Sguazzin, 2020) will compensate claimants through both its existing mechanisms and a new disaster benefit fund. The state-owned Industrial Development Corp. is providing R3 billion for the acquisition of medical supplies. The Small Enterprise Agency will postpone loan repayments by creditors for six months. The government also allocated R1.2 billion grants to small scale farmers to maintain food security. These palliatives put in place by the National government is helping the unemployed pay for their necessities, assisting businesses to have enough cash flow to survive the lockdown period and adequate food and medical supply, which is a good thing.
The probable implications of these National policies are lower hospitalization and crime rates at the city level. The provincial hospitals are therefore not overburdened with COVID-19 patients, while the police services are not overstretched as a result of people resorting to crime to meet essential needs.
Management of COVID-19 by the City of Cape Town
The role played by the National and city-level governments are complementary, not adversarial in South Africa. The National government takes care of the broader economic issues, while cities are responsible for social and environmental issues. The City of Cape Town however provided a respite in rates/ground rents. In addition, it put in place mitigation measures to manage the impact of the COVID-19 virus. These are itemized below:
These are interventions that can be adopted by other African cities. However, the results of the measures taken by the City of Cape Town will not be fully known until the end of the COVID-19 pandemic. As of June 22, there were a total of 39,909 confirmed Coronavirus cases, 29,710 confirmed recoveries in the City of Cape Town and 1,424 deaths in the Western Cape Province of South Africa (Western Cape Government, 2020). The expected impact of the measures put in place by the City of Cape town is that the curve in infection rates would flatten as we head into the Southern Winter season, while it is expected that the number of COVID infections will be at its peak in August. The relief provided by the city to assist residential property owners who are out of work means that more money can go into paying for basic needs. The city is much cleaner, and people can afford to stay at home if they are not essential workers.
Going forward, the government has to continue to support the South African economy and vulnerable people by providing them with stimulus packages at 0% interest rates. Plans and funds for a suite of new projects aimed at providing the necessary economic stimulus for providing traction to the economy must be put in place. Researchers should investigate the lessons learnt from and the opportunities presented by the COVID-19 pandemic in an economic and social context.
Davis, R., 2020. SA Lockdown explained by government: Part 1 – health and economics. [Online]
Available at: https://www.dailymaverick.co.za/article/2020-03-24-sa-lockdown-explained-by-government-part-1-health-and-economics/[Accessed April 16 2020].
Harding, A., 2020. South Africa’s ruthlessly efficient fight against coronavirus. [Online]
Available at: https://www.bbc.com/news/world-africa-52125713[Accessed April 16 2020].
Western Cape Government, 2020. Covid-19 Response. [Online] Available at: https://coronavirus.westerncape.gov.za/news/update-coronavirus-premier-alan-winde-22-june/ [Accessed 22 June 2020].
The views expressed in this article are those of the author(s) and not necessarily those of the Centre for Housing and Sustainable Development or the University of Lagos, Nigeria.