South Africa: Fresh stimulus plan underway

South Africa: Fresh stimulus plan underway

By John Eche

Buffeted on all sides, the managers of the South African economy are presently working out the fine outlines of a fresh stimulus plan to combat the debilitating effects of the negative economic headwinds that the country continues to be gripped in.

Beginning with the big spending choices that were made in the aftermath of the end of apartheid and the process of integrating the majority African population that had been excluded from the real economy, the economy was to be further afflicted by a rash of ‘compensation pilfering’ from many of the new leaders that emerged on the scene and which has since cast a pall on the legacy of the rainbow nation’s most illustrious leader, Nelson Mandela.

More recently, the troubles of the South African economy have come to rest on the outbreak of the COVID-19 pandemic, which has had a quite debilitating effect on the nation.

With South Africa topping the charts as the country with the highest numbers of people infected by the virus, it has also been one of the nations to endure about the longest lock-down stretch, complete with its debilitating impact on economic activities in the country.

At the moment now, the country is faced with the daunting challenge of restarting its economy, even as it is now witnessing a drop in Coronavirus cases.

This week, President Cyril Ramaphosa announced the easing of restrictions and called on South Africans to ‘get to work, rebuilding’ the economy.

However, directives to wear masks in public, observe social distancing and regularly wash hands remain in place along with a national curfew, which will now only run for four hours daily; from midnight until 4am

The easing, which begins midnight Sunday, permits larger social gatherings, extended hours for the sale of alcohol, a return from next month to international travel under strict conditions as well as the full reopening of the construction and manufacturing industries.

Clearly bothered over the effect the negative economic headwinds had had on the nation, Ramaphosa rued: “Our economy and our society have suffered great devastation. We have endured a fierce and destructive storm.”

Already caught in the throes of a recession even before the pandemic, the economy shrunk by a further 51 percent during the second quarter of 2020.

In particular, construction, manufacturing and mining, shrank by 76.6 percent, 74.9 percent and 73.1 percent, respectively, with personal services, including hospitality dropping by 32.5 percent.

There had equally been long-standing concerns over high unemployment and poverty and now with more than 650,000 coronavirus infections and 15,000 related deaths, South Africa really does have compounded work on its hands.

“Just as we have acted together to defeat this virus, we must roll up our sleeves and get to work rebuilding our economy. We have a mammoth task ahead of us,” Ramaphosa said in his speech, rallying his people to roll up their sleeves.

President Cyril Ramaphosa of South Africa