Trade and Industrial Policy Strategies' (TIPS's) 'Tracker: The economy and the pandemic' highlights important trends in the Covid-19 pandemic in South Africa and how they affect the economy.
Daily growth in reported new cases has exceeded 7% a day in Gauteng, KwaZulu-Natal and the North West, and was at 5% in the Eastern Cape.
Total reported cases more than doubled over the past two weeks to reach 264 000, while the seven-day rolling average of new cases climbed from 5 000 on 26 June to 11 000 on 12 July. For the week to 11 July, South Africa reported more new cases per million people than the us or Brazil, which have been famously unable to control the spread of Covid-19.
Newly diagnosed cases have essentially plateaued in the Western Cape since 20 June at around 1 200 a day. As a result, the Western Cape’s share of new cases reported in South Africa fell from half a month ago to a sixth in the past week.
The divergent regional trends raised the question of how to understand the factors driving infection rates. The much-heralded “peak” is, after all, only visible when the number of new cases starts to fall.
In contrast to seasonal flu or diseases like measles, for which preventive measures exist, the only way to bring down the number of cases is behavioural change on a mass scale. Yet the government reimposed limited restrictions on especially risky activities only on 12 July, six weeks after the growth in new cases began to escalate.
ECONOMY
Looser restrictions on business contributed to the rapid spread of Covid-19 but, after a spurt in economic activity, the available indicators suggest that the recovery remains very slow. The challenges appear primarily in suppressed demand as escalating risks of infection in the metros,
South Africa’s economic drivers, keep high-income consumers largely at home; most households have lost income; and export demand remains largely flat, with most commodity prices still lower than before the pandemic.
In the past week, both the ANC and Business for South Africa (B4SA) published proposals on how to boost the recovery. They share some important themes, notably around the need to mobilise both private and public financing for an infrastructure drive, the critical importance of fixing Eskom, and the need to avoid disruption to commercial agriculture.
The main substantive disagreements emerge about how best to manage broad-based black economic empowerment (BBBEE) and create a more dynamic and competitive economy.
Neither paper appears to have any new ideas on immediate measures to cushion the effects of the anticipated depression-level economic decline over the coming year. Income losses are likely to be severe for low-income households, small business and local governments.