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Fears that further restrictions could devastate the economy as Covid infections surge

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Business and employers are fearful that further restrictions in an effort to control the rising Covid-19 infection rate would devastate the economy and lives.

Economist Mike Schussler says that another phase of lockdown would give the already battling economy a further knock. Picture: David Ritchie/African News Agency (ANA)

BUSINESS and employers are fearful that further restrictions in an effort to control the rising Covid-19 infection rate would devastate the economy and lives.

Fears of a possible move to Level 2 restrictions were sparked following President Cyril Ramaphosa’s statement that he would be meeting with the National Coronavirus Command Council (NCCC) on his return from West Africa to review the state of the pandemic.

Ramaphosa said that over the past week the number of daily infections had increased five-fold.

The National Institute for Communicable Diseases (NICD) said that as of Sunday, 11,125 new Covid-19 cases had been identified across the country, representing a 23.8% positivity rate.

“As the country heads into the fourth wave of Covid-19 infections, we are experiencing a rate of infections that we have not seen since the pandemic started.

“Nearly a quarter of all Covid-19 tests now come back positive. Compare this to two weeks ago, when the proportion of positive tests was sitting at around 2%.

“As we enter the fourth wave, and as the country gears up for the festive season, the urgent priority is for more people to get vaccinated.

“The massive surge in infections means that, in addition to vaccination, we need to be far more diligent in reducing our contact with people outside our households.

“We will soon be convening a meeting of the NCCC. This will enable us to take whatever further measures are needed to keep people safe and healthy.”

The president said that while he understood social distancing was difficult as the festive season approached, the evidence showed that gatherings, mainly those held indoors, carried the greatest risk of transmission.

Cape Chamber of Commerce and Industry president Jacques Moolman said: “If the speculation is correct and we will be moved back to Level 2 restrictions, then we can only hope the NCCC realises the devastating effect it will have on the economy, and specifically on the small business sector.

“Tourism countrywide will probably be hardest hit, but the Treasury and the wider economy will also take a heavy blow. The imposition of harsher lockdowns risks having a harsher impact on society than the pandemic.”

Beer Association of South Africa (Basa) chief executive Patricia Pillay said: “Another alcohol ban over the coming festive season, a time when we expect some recovery for the tourism and hospitality sector, would serve as the final nail in the coffin for thousands of businesses and citizens who just barely survived the previous bans.”

Business Leadership South Africa (BLSA) chief executive Busi Mavuso said: “We have learned from the past 20 months that restrictions on domestic economic activity have a serious impact on the economy, leading to job losses, poverty, and ultimately worse health outcomes.

“Any purported health gain from restrictions must be compared to the losses from reduced economic activity. And achieving the health objectives is best achieved through the vaccine programme.”

Economist Mike Schussler said another phase of lockdown would give the already battling economy a further knock in confidence.

“If we carry on locking down again, that will have an impact, either this quarter or the next. Since the end of 2018 South Africa has lost 2.2 million jobs – that’s one out of every seven jobs. I really cannot see that we can go into another lockdown level.

“We’re going to kill more people because of hunger and from depression and various other diseases if we go into another lockdown situation.

“The cost to the economy and the cost to lives, real lives across the spectrum, whether it is from cancer, mental health, businesses failing and people going through phases of hunger, are costs that need to be weighed.”

He said that people should instead be encouraged to get vaccinated, wash their hands and social distance and keep as much of the economy open as possible.

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