With the prospect of a third wave of Covid-19 infections a concern in South Africa, the risks to the economy of repeating past mistakes are “clear and well known”, laments Business Leadership South Africa (BLSA) CEO Busi Mavuso in her weekly newsletter.

She refers to certain segments of the economy having suffered an unbearable cost as a result of curfews and shutdowns, especially tourism, which employs a large number of unskilled workers and women.

The hospitality industry has been similarly affected, operating with about two-thirds of the revenue it earned before the pandemic, where the first lockdown saw hotels’ income fall by 97%.

The latest Statistics South Africa (Stats SA) data shows it is still 28% of what it was before the lockdown.

The alcohol industry has faced four bans during the pandemic, most recently over Easter, and it has been calculated that the industry has lost R36.3-billion from the first three bans alone.

“Unnecessary damage was caused by the fact that bans were open-ended, so the industry could not even plan for how long they would need to suspend operations for,” Mavuso comments, noting that the industry subsequently funded independent academics and researchers to assess the impact of these bans on hospital admissions, which was the purported point of the bans.

These academics and researchers found that South Africa’s 60% reduction in trauma admissions was in line with that experienced in other parts of the world, where alcohol bans were not implemented. In the UK, for example, the drop in trauma admissions was 57%, while that of Ireland was 62% and the US 54%.

Mavuso further refers to the cigarette ban as “clearly irrational”, considering that, despite the legal industry being shut down, cigarette consumption hardly budged, with 84% of smokers having continued to buy cigarettes during the ban, according to one study.

“The average price increased by 250%, which meant the illicit economy boomed, a legacy that will be hard to address in future so illegal cigarette sales may be permanently higher,” she adds, noting that the National Treasury has budgeted for a R24-billion decline in excise tax collections in 2020/21 because of the alcohol and tobacco bans.

Besides these obvious costs in terms of earnings and tax collections, Mavuso says “the less obvious costs in terms of livelihoods disrupted may be far greater” as Stats SA data shows the number employed in the trade sector fell by 300 000 before the pandemic compared with the last quarter of last year.

Most of those who lost jobs were women, making up a big part of the 1.3-million jobs that are yet to be recovered since the start of the pandemic.

Mavuso calls for “sense to prevail” as the South African government considers policies to limit the impact of the third wave.

“We must protect lives and livelihoods. We now have clearer insight into the impact of certain policies on the economy, as well as the impact on health outcomes. Businesses have invested to be able to operate safely – the priority must be to set out safe operating protocols and let business get on with adapting to them,” she elaborates, emphasising that bans, curfews and shutdowns are “hugely damaging and have questionable impact on public health”.

Taking this into account, she reiterates that BLSA and its members “stand ready to support government in finding this balance”, highlighting that consultation is important as “businesses can highlight unintended consequences and help government find the optimal policies to meet health objectives without inflicting unnecessary damage to the economy”.

COVID-19 VACCINATION ROLLOUT UPDATE

Mavuso’s weekly newsletter coincided with the start of the second phase of South Africa’s national vaccination programme, which targets the balance of healthcare workers and people older than 60.

“Although much has been done, we also realise that we need to maintain the high levels of cooperation and accelerate the scale of registration and vaccination. Business fully supports vaccination.

“In respect of Covid-19, vaccination is the best health policy, it is the best social policy and it is the best economic policy,” comments Business for South Africa (B4SA) steering committee chairperson Martin Kingston in a separate statement issued on May 16.

As part of South Africa’s 14-month-long battle with the pandemic, Kingston notes that business has worked with the National Department of Health and the Solidarity Fund to create the capacity to vaccinate the nation.

“Thousands of lives, and our ability to return to our way of life and ensure that we can put the economy on an optimal growth path, depends on us successfully implementing the vaccination roll out strategy and bringing all of our collective resources to bear,” he says, noting that the programme starts with the most vulnerable – 5.4-million people older than 60 years.

Once these people have been vaccinated, the vaccination programme will be extended to the balance of the country’s adult population.

He urges that the programmes must be completed “as quickly as possible”, adding that B4SA is mobilising vaccination sites throughout the country, be they hospitals, pharmacies, clinics and medical practices, as well as occupational health and safety sites across many sectors, as well as larger facilities.

Over the coming days and weeks, many more vaccination sites are expected to open and will comprise 13 private sites online, capable of administering 3 500 vaccines daily, increasing to nearly 40 sites by the end of this week and nearly 80 sites by the end of next week by which time the country should have the capacity to administer over 22 000 vaccinations a day.