The Carnage Of Corona

As South Africa enters a three-week lockdown to curb the spread of Covid-19, government and the private sector are braced for the crippling consequences it will have on our already weak economy. But the measures being put in place can only do so much.

- Mariam Isa

Job losses could amount to 500 000, with small-and-medium-sized companies hardest hit.

South Africa’s economy will contract severely this year as the impact of drastic global measures to contain the spread of Covid-19 tips the entire world into a recession and raises the risk of a depression, which is a severe economic downturn that lasts for several years.

The decision to put the entire country into a three-week lockdown from 26 March was taken to prevent a humanitarian disaster well beyond the scope of SA’s health sector, which is ill-equipped to cope if the disease spreads into poor, densely populated areas where people are the most vulnerable.

Lockdowns had already been imposed in all of SA’s main trade partners – the US, Europe, and the UK – following China’s success in containing the pandemic with restrictions that other countries initially viewed as too draconian in Wuhan province, the epicentre of the outbreak.

India shut down its economy the day after President Cyril Ramaphosa’s announcement, taking the number of countries in lockdowns to 20.

What this means is that the engines of most of the countries that drive the global economy have ground to a halt, and governments have resorted to costly measures to keep their economies afloat. SA was forced into the same predicament, and with an economy already in recession and limited fiscal resources, the impact will be severe.