Don’t waste a crisis: Could coronavirus be government’s chance to speed up reforms?

“Never let a good crisis go to waste.”

The words of the late British Prime Minister Winston Churchill are ever more relevant as the world battles the Covid-19 pandemic.

While the South African economy has already taken a beating, the pandemic has arguably presented a golden opportunity to roll out structural reforms at a much faster pace. It has thrown a spotlight on the country’s weaknesses, and forced rapid action to address these, experts say. 

Alexander Forbes chief economist Isaah Mhlanga believes Covid-19 has made the “ills” of our country more prominent.

“We have always had them; high unemployment and high inequality. Covid-19 exposes things more and requires a rapid response from government,” he said. “There’s a bigger push to make sure that structural reforms happen faster than before we had this pandemic,” Mhlanga added.

One of the structural reforms government has touted is the release of spectrum.

Since the lockdown, the Independent Communications Authority of South Africa granted mobile operators and other internet providers additional spectrum, which could go a long way in supporting employees working from home, parents having to homeschool children, or entrepreneurs running their businesses.

RMB analyst Matete Thulare said one of the upsides of Covid-19 has been the increase in productivity. “People are getting in and out of meetings quickly and having much more robust engagements,” he said. Online meeting spaces, from Microsoft Teams to Zoom, have fast become a new normal.

Forced to rethink

According to Thulare, the pandemic presents an ideal opportunity to modernise, become more efficient, and implement reforms where necessary. 

“This is the time to actually implement structural reform … it forces us to rethink the way we do things from government perspective even in terms of the social grant payment system,” Thulare added.

In recent weeks government has been able to pinpoint flaws in the existing systems used to distribute social grants and other benefits.  

Thulare is optimistic that the pandemic might even influence the way the National Health Insurance Fund is implemented to truly benefit all citizens.

“This period is giving people a lot of time to rethink how to do business. In every crisis there is an opportunity for people to take advantage of. So we shouldn’t been looking at the negatives only, but we should be thinking of the positive we can take out of this,” he said.

Response to feedback

Some have also argued that the pandemic has given government the opportunity to demonstrate its responsiveness to feedback.

In his address to the nation this week, President Cyril Ramaphosa acknowledged that mistakes had been made, but that government would endeavor to correct them. Most notably, one of the decisions government has reversed is to allow e-commerce under Level 4 of lockdown.

The newly gazetted regulations allow for any item to be sold, except for alcohol and cigarettes.

Speaking on behalf of the Business For South Africa, Martin Kingston said the move would ensure that jobs are saved and lives improved. “This decision by the minister shows a welcome willingness to respond to input by business and a commitment to continuously improve the regulations governing business based on the best evidence available,” Kingston said.

Accelerating innovation

E-commerce would allow the opening of the economy, while maintaining social distancing and it can support local manufacturing and increase access to goods by small business in the informal market, he added.

“We strongly believe in the value of e-commerce as a critical enabler to opening the economy through contactless transactions. This can reduce the movement of consumers, and the density of shoppers in retail spaces. Further it can accelerate innovation, support local manufacturing and increase access by the informal market and poorer South Africans,” Patel said in a statement.

The minister also has hope that e-commerce might have a firmer footing in the economy in future. “Beyond the pandemic, we are likely to see a shift from traditional retailing to e-commerce platforms.

“We look forward to future engagement with the sector to address how to create more jobs in the sector and retrain workers displaced by the shift to e-commerce and to ensure that there is space for local small businesses and youth-owned enterprises as suppliers of goods and providers of digital platforms and delivery services,” he said.

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