President Cyril Ramaphosa has warned that South Africa faces tough economic times ahead due to the fallout from the COVID-19 pandemic, and it will take a long time for output to return to pre-pandemic levels.
In a weekly newsletter, Ramaphosa said even the public sector would not be spared from the negative consequences of a nationwide shutdown of economic activity aimed at slowing down coronavirus infections.
South Africa has so far recorded 97,302 cases of COVID-19, by far the highest national tally on the continent, out of which 1,930 people have died while 51,608 have recovered.
Globally, more than 8.7 million people have been infected with the virus first detected in China last December, with nearly 462,000 having died as of Sunday, according to the latest World Health Organisation update.
Ramaphosa said as South Africa’s economy found itself in the throes of the anticipated fallout from the global health crisis, the predictions of businesses shutting down and jobs being lost were materialising.
“Last week a number of companies announced plans to retrench staff,” he noted.
“From aviation to construction, from entertainment and leisure to hospitality, companies have indicated their intention to retrench staff because of heavy losses incurred over the past three months. In other cases, businesses are closing permanently. Small businesses whose turnover has been wiped out will be even harder hit.”
“For a country such as ours, which was already facing an unemployment crisis and weak economic growth, difficult decisions and difficult days lie ahead,” the president added.
The economic hardship forced on companies in the private sector would be forced on a number of entities in the public sector as well, and the government, business, labour and civil society would have to deepen their collaboration in driving the national recovery effort, he said.
Finance Minister Tito Mboweni is due on Wednesday to table a revised national budget in Parliament which will incorporate the fiscal impact of Covid-19.
In his newsletter, Ramaphosa said revenue had plummeted and difficult decisions would be made in the coming weeks and months to reprioritise programmes, manage public spending and scale back on projects where necessary.
“There are tough times ahead,” he cautioned.
“There are no quick-fixes and we have to be realistic about our prospects, especially about the time it will take for our economy to recover.”
-ANA, Editing by Stella Mapenzauswa