Some businesses will reopen in May – but it won’t be business as usual

The strict coronavirus lockdown – which was extended from 16 April until the end of the month – will not be extended again, President Cyril Ramaphosa announced on Thursday night.

However, the phased reopening of the economy means taking a “risk-adjusted” approach, and restrictions will be lifted only on certain sectors, the president said.

Fin24 previously reported that government was adopting an approach based on five alert levels, ranging from level 1 – where all sectors are fully operational – to level 5, namely full lockdown. South Africa is currently on full lockdown.

As from 1 May, the country will be moving down to level 4. Here’s what that means.

Some businesses will reopen – but it won’t be business as usual

“Some activity will be allowed, subject to extreme precautions,” the president said.

Businesses that are allowed to resume activity will be allowed to do so under specific conditions. Every business will have to adhere to detailed health and safety protocols to protect their employees, and plans will have to be put in place for disease surveillance and to prevent infection.

Talks are still ongoing

Ramaphosa did not announce which businesses would be allowed to reopen – though he did say cigarettes, and some other additional goods, would be on sale. Food retail stores that are already open are expected to be allowed to sell the full line of products within their existing stock. 

In weighing up whether a sector would be allowed to operate, its economic contribution, the effect on livelihoods, and the risk of transmission in each sector would be considered, he said.

Ministers will give a detailed briefing on the classification of industries and how each is affected in due course. Each industry will be given the chance to make submissions before the regulations are gazetted.

Return to business will be gradual

Businesses that open will do so in a phased manner, Ramaphosa said, first preparing the workplace for a return to operations, followed by a return of the workforce in batches of no more than one third.

“In some cases, a sector will not be able to return to full production during level four,” he said.

Level adjustments will be determined by the NCC

The National Command Council will determine what level is necessary based on an assessment of the infection rate in conjunction with the capacity of the healthcare system, Ramaphosa said.

Working from home is still first choice

“Businesses will be encouraged to work from home where possible,” said Ramaphosa. “All staff who can work remotely must be allowed to do so.”

Travel regulations will still be tight

The tourism industry is one that is unlikely to experience relief any time soon, as borders will remain closed to international travel except for repatriation of South African nationals and foreign citizens.

No travel between provinces will be allowed except for the transportation of goods, or exceptional circumstances like funerals.

Public transport will operate… with strict rules

Public transport will be subject to limitations on passenger numbers, and there will be stringent hygiene rules.

All passengers must wear masks, Ramaphosa said.

Sorry, still no bars or shebeens

Bars and shebeens will remain closed, as will conference and convention centres. Concerts are still prohibited, as are sporting, religious and cultural events. All gatherings barring funerals and work meetings are prohibited.

“The coronavirus is spread by contact between people,” Ramaphosa said. “If people don’t travel, the virus does not travel.”

The president stressed that while it was crucial to limit economic damage, government was also acting on the advice of scientists.

“The action we must now take must be measured and incremental,” he said.

The president on Tuesday announced a R500 billion stimulus package in a bid to mitigate the impact of the extended lockdown on South Africa’s economy, which is expected to be severe.

Interventions announced included additional grants, several tax relief measures,  R100 billion budgeted towards preserving and creating jobs, an extensive food parcel delivery programme, and R20 billion additional budget to boost municipal service delivery.

While R130 billion will be reallocated from the existing budget, R200 billion will be provided in the form of a loan guarantee scheme, in partnership with major banks, National Treasury and the SA Reserve Bank. The remaining R170 billion would be sourced from Covid-19 support loans from international financial institutions, global partners and local sources such as the UIF.

The country was already in recession before the coronavirus hit, after two consecutive quarters of negative growth, and has had its sovereign credit rating downgraded to junk by Moody’s.

Treasury has projected a deep recession during 2020, while the Reserve Bank has said a contraction of as much as 6.1{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} is likely. The International Monetary Fund, for its part, has projected a contraction of 5.8{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}, while Moody’s has suggested a more conservative -2.5{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}.

South Africa’s economy experienced a 1.5{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} contraction following the 2008 global financial crisis.

Job losses in South Africa due to the coronavirus pandemic have been projected at anything from 370 000 – according to the Reserve Bank – to one million, according to preliminary modelling by Business for South Africa, a business alliance formed in March in response to the pandemic. This would follow the pattern of record job losses in the United States, which, according to the latest jobs data released on Thursday, have wiped out gains recorded in the boom following the Great Recession.

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