Recovery from the decline in the economies of Southern African countries as a result of the Covid-19 pandemic has been rapid since the worst-felt period of 2020’s lockdowns and consequent shutting of economies, economic research institution Trade and Industrial Policy Strategies (TIPS) senior economist Neva Makgetla said on May 19.
For the whole of 2020, Southern Africa’s regional gross domestic product growth was about 6% below that of 2019, with available evidence indicating that the pandemic depression aggravated inequalities in the region.
As a result, less-skilled workers saw disproportionate loss of livelihoods, while small businesses were also more likely to close down as opposed to larger ones.
Governments also cut services in response to falling revenues, resulting in the sharpest impact on low-income households and communities.
Makgetla said the pandemic in Southern Africa was more limited than how it had been experienced elsewhere, as the region is more rural, there is less mobility and populations are less dense, meaning infections were relatively limited.
Also, she noted that infection waves mostly started later than those in the northern hemisphere, with the surges tending to be in the middle of 2020 rather than in March.
Further, part of the reason for seemingly lower infections were significant under-testing and under-counting of cases.
“In much of the region, there are low levels of testing and even death rates are difficult to count.”
South Africa and many other Southern African Customs Union countries saw the highest reported diagnosis and it was much lower in the rest of region, but even then the peaks were lower and the total incidents were much lower than in much of the rest of the world, and particularly lower than in the northern hemisphere
Nonetheless, she said economic recoveries were often stronger in terms of the budget impacts, even surpassing forecasts by the International Monetary Fund.
Going forward, Makgetla said the Southern African region is forecast to mostly fully recover in about 2022, a timeframe that may be sped up if commodity prices remain high.
In terms of the negative impact by sector, she said the least impacted sectors were mining and agriculture, mostly because they were able to work during the lockdowns and also because they are less effected by domestic and regional demand.
“In the case of both, they are producing necessities,” Makgetla added.
In addition, she said the Southern African manufacturing sector also recovered relatively rapidly, post the second quarter of 2020 and, in South Africa, manufacturing and mining are currently at the same levels as they were prior to the pandemic.