5 key takeaways from COVID-19 lockdown extension

Posted on Aug 5, 2020 by Nonhlanhla

Rateweb | South Africa

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JOHANNESBURG: President Cyril Ramaphosa on Thursday announced a raft of measures his government had undertaken in order to combat Coronavirus that has claimed over 100 000 lives.

Summary:

  • President Cyril Ramaphosa extended the COVID-19 lockdown to the end of April
  • President Ramaphosa informed South Africans that the infection rate has dropped from 40% to 4%
  • He announces a three-pronged approach to tackling the impact of COVID-19
  • “There is a need to upscale information dissemination”- Roland Van Der Walt
Cyril Ramaphosa

Having declared a 21 day nationwide lockdown that started on 21 March 2020, Ramaphosa on Thursday night addressed the nation, declaring an extension to the lockdown by 14 more days as the government enhances its efforts to flatten the curve.

This means that most of the existing lockdown measures will remain in force until the end of April.

In announcing the extension, which has been commended across the board. Ramaphosa acknowledged that he is keenly aware of the impact this extension will have on the economy but there was a great need to take these difficult measures to protect the country from being engulfed and consumed by this pandemic.

“We all want the economy to come back to life, we want people to return to work, we want our children to go back to school, and we all want to be able to move freely again. But our immediate priority must remain to slow down the spread of the virus and to prevent a massive loss of life.

“We must do this while preventing our economy from collapsing and saving our people from hunger. We are determined to pursue a path that both saves lives and protects livelihoods,” said Ramaphosa.

The President focused on a three-pronged approach in order to ensure that South Africa is able to sufficiently deal with the Coronavirus pandemic:

  • Firstly, an intensified public health response to slow down and reduce infections.
  • Secondly, a comprehensive package of economic support measures to assist businesses and individuals affected by the pandemic.
  • Thirdly, a programme of increased social support to protect poor and vulnerable households.

All stakeholder approach in combating COVID 19

Government, together with its many partners, have used this lockdown period to both refine and intensify the public health strategy to manage the coronavirus.

The approach is to screen in communities and test people in hospitals, clinics and mobile clinics, isolate those who are infected, and to care for those who are ill in the country’s health facilities.

This is being done intensively and systematically with the government expected to roll out the community screening and testing programme across all provinces, focusing in particular on highly vulnerable communities in the next two weeks.

Those who test positive and cannot self-isolate at home will be isolated at special facilities that have been identified and are now being equipped.

To ensure that these strategies are effectively coordinated and to ensure they are informed by comprehensive, real-time data, Government has established the COVID-19 Information Centre at the Council for Scientific and Industrial Research.

This world-class centre will keep track of all screening, testing, isolation and hospitalisation throughout the country. It is already identifying infection hotspots.

According to Ramaphosa, Government is already working with mobile telephony companies and other institutions to locate those people who have tested positive for the virus and those with whom they have been in contact.

As part of the second element in Government’s strategy to combat COVID19, Ramaphosa’s administration has put in place various measures to provide support to businesses in distress, workers facing a loss of income, those who are self-employed and informal businesses.

Many of these measures are being taken up by both large and small businesses.

Utilising the Unemployment Insurance Fund

The Unemployment Insurance Fund (UIF) has set aside R40 billion to help employees who will be unable to work, as part of the effort to prevent jobs losses as a result of the lockdown. To date, it has paid out R356 million.

This low uptake of the UIF has led to growing concerns that individuals affected by COVID 19 are not fully utilising this fund.

Roland Van Der Walt analysis

According to Roland van der Walt Chief Marketing Officer of Instacom, there is a need to upscale information dissemination on the fund so as to reach every worker and employer who has been affected by the lockdown measures.

“The first challenge being set in motion is that Africa doesn’t fully utilise some of the opportunities availed to them. This is largely due the fact that information is not sufficiently cascaded down to its intended beneficiaries. Hence the need for government to escalate its information dissemination efforts. So that all Employers and employees affected by COVID 19 get access to the UIF,” said Roland Van Der Walt.

He also added that the lengthy application process could be hindering many people and companies from accessing the fund. Hence the need to relax the set rules so that the R40 billion is fully exhausted.

“The other contributing factor to the low intake of the fund is the rules and regulations accompanying the application process. Getting the certificate thereof is another cumbersome process. As such government needs to relax the rules and regulations so that most companies affected by COVID 19 benefit.

“In a nutshell, the combination of the long process. And lack of knowledge of the fund contributes extensively to the low uptake of the R40 Billion. Relevant authorities must increase the educational portion of the fund so as to enhance knowledge of the fund,” he said.

Underlying economy continues to function

President Ramaphosa applauded employers who have continued to pay their workers during this difficult time. As well as those employers who are working with unions and government to assist their employees to access these benefits.

He further made a call on all businesses to continue to pay their suppliers. To the extent that they can ensure that those suppliers can also continue to operate and pay their staff and suppliers.

“In this respect, I would like to appeal to all large businesses not to resort to force majeure. As such practice has a domino effect on all other businesses dependent on that chain. We must do all we can to ensure that the underlying economy continues to function. And to focus support on those small businesses that really need them,” said Ramaphosa

Van Der Walt concurred fully with President saying this move will protect small businesses from being prejudiced by bigger companies who may be taking advantage of this crisis.

“What he is saying is true, in my own company, we have come across bigger companies that are requesting a 25% reduction on costs and extension of payment terms. That is a very huge percentage cost which we had never planned to incur. So the proclamation by the President is protecting the small business as the refusal by bigger companies to fulfil their commitments was putting a strain on the operations and sustenance of smaller business who were ultimately failing to pay its workers,” said Van Dan Walt.

In addition to these expenditure measures, the Reserve Bank has also lowered interest rates and has taken measures to inject liquidity into the economy.

Ensuring Small Business Stay Afloat

The Small Enterprise Finance Agency has also approved the postponement of loan repayments for a period of 6 months. This is highly likely to assist those they had loans due for repayment but were likely to struggle to pay the loans due to the lockdown imposed by government to flatten the Corona virus curve.

Equally, the small business debt relief and business growth facilities are currently adjudicating applications for assistance. There is a total of R500 million available in support.

Small Business Minister, Khumbudzo Ntshavheni is on record saying this fund is aimed at providing relief on existing debts and repayments.

“For SMMEs to be eligible for assistance under the debt relief fund, the applicant must demonstrate the direct link of the impact or the potential impact of Covid-19 on business operations.

“This facility will also assist entities to acquire raw material, pay labour and operational costs. All these interventions will be structured to match the patterns of the SMMEs cash flows, as well as the extent of the impact suffered,” said Ntshaveni

To qualify for access to the fund, businesses will be required to register on the SMME South Africa platform.

The extension of the 21 days lockdown by 14 days will have devastating effect on food security and in an effort to ensure consistent food supply, the Government has reprioritised R1.2 billion to provide relief to smallholder farmers and to contribute to the security of food supply.

Government has also been working to provide basic needs such as water and to maintain the reliability of food supply to the poorest South Africans expanding provision of food parcels and providing spaza shops with financial support.

Opportunity in Provision of Medical Supplies

One of the biggest challenges that all countries in the world are facing is the shortage of medical supplies to fight the coronavirus.

The Industrial Development Corporation has set aside R3 billion for the procurement of essential medical supplies.

It has already approved R130 million in funding and expects to approve a further R400 million in the coming week to companies who applied for funding under this special facility.

President Ramaphosa highlighted that as a country we have had to rely on our own capabilities to supply these goods, but have also had to source supplies from other countries.

In recent weeks, we have seen a massive mobilisation of South African business, labour, academics and government agencies to build the stocks of medical and other equipment needed to fight coronavirus.

For example, there has been the establishment of the National Ventilator Project to rapidly mobilise the technical and industrial resources of our country to manufacture non-invasive ventilators, which can be used to support patients afflicted with the disease.

Other projects are focusing on increasing the local manufacture of protective face masks, hand sanitisers and pharmaceutical products which can be used by health care workers and the public at large.

Beyond Lockdown

Cabinet will be developing a comprehensive package of urgent economic measures to respond both to the immediate crisis and to the severe economic challenges that we must confront in the months ahead.

Further announcements on the next phase of economic and social support strategy will be made in due course.

“As we emerge from this crisis, our country will need to undergo a process of fundamental reconstruction. To do so, we will draw on our strengths: our abundant natural resources, our advanced infrastructure, our deep financial markets, our proven capabilities in information and communication technology, and the depth of talent among our people.

“We will draw on our proven capacity for innovation and creativity, our ability to come together in a crisis, and our commitment to each other and our common future.

“We will learn from global experience and the best scientific evidence, but we will craft a uniquely South African response that uses our own capabilities as a nation,” concluded Ramaphosa.

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