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By the time you read this, South Africa would have been in a state of lockdown for more than 300 days, and there is no end in sight; here or globally. We know that the economic consequences of this have been devastating for our country. Don’t be fooled by the GDP growth numbers for the third quarter of last year; 13,5% off the back of a 16,6% slump the previous quarter is not growth.
Much has been written about the uniqueness of 2020 and all the changes and uncertainties that have come with it. What started as a localised and isolated health scare, very soon spread to a global pandemic. Despite fatality numbers being relatively modest as pandemics go, the uncertainty about the disease, and its transmission and propagation, caused an extreme leadership response.
The DTI has failed business in exchange for being BBBEE politically correct! The Department of Trade and Industry have shown an astonishing naivete at best and total disregard at worst for business sustainability, in not extending current BBBEE certificates for at least a year, because of COVID-19.
As South Africa prepares to hear Finance Minister Tito Mboweni’s medium-term budget speech this week, it is becoming increasingly clear that the country needs a new post-COVID-19 approach to the tobacco industry and the growing illicit tobacco sector.
COVID-19 cannot take all the blame for the disruptions taking place in the global economy. The pandemic and resultant lockdown simply provided a conduit for highlighting the failings across industries in South Africa, whether that is healthcare, public transport, education, or others.
Leverage virtual meeting tools and capabilities to cement customer and employee relationships. The current coronavirus pandemic has caused many countries such as UK, USA, Italy, Spain, South Africa and Germany, among others to follow a lockdown approach.
Companies have been facing tough decisions over the past few months, particularly those with employees who cannot work during the crisis. The South African lockdown during the COVID-19 pandemic has had a significant impact on industry, market and business.
The rapid changes experienced over the past few months and leading to the current relaxation of lockdown levels, has resulted in the South African economy’s recovery taking the shape of a ‘swoosh’ of a fast decline then a quick recovery that will take time to be fully realised.
On Tuesday Stats SA announced that SA’s GDP had contracted 51% between April and June (using annualised quarter on quarter numbers – in other words, this is a 17% decrease for the quarter) as a result of the lockdown imposed in response to Covid-19. The contraction was shocking – but not unexpected. Given that government took the decision to implement one of the harshest and longest lockdowns globally, the severity of the economic contraction should not come as a surprise.
Real GDP surprised the market consensus to the downside in the second quarter of 2020 as the effects of the pandemic and the associated lockdown measures ate into economic activity. Growth contracted by 51% q/q saar and printed lower than the August 2020 Reuters Econometer median growth forecast of 44.5% p/p saar.