LIKE elsewhere across the globe, in an effort to curb the spread of the COVID-19 pandemic, South Africa imposed restrictions on social mobility and interaction, with a five-week national lockdown between March 27 and May 1, followed by a risk-adjusted, phased reopening of the economy.
Such a lockdown policy, however, was always going to induce substantial welfare losses to individuals and households.
These pandemic-related shocks to employment, working hours, and earnings among low-wage and vulnerable workers exacerbated the already high levels of poverty and inequality in South Africa. With these welfare losses in mind, last month, President Cyril Ramaphosa presented the government’s Economic Reconstruction and Recovery Plan (ERRP) to restore the South African economy following the devastation caused by the pandemic. The Ramaphosa COVID-19 stimulus package, originally announced on April 21, is huge, amounting to approximately $26 billion, or 10 percent of the economy’s GDP (Figure 1).
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