Thebe Mabanga
The South African government has pro-actively moved to ensure that economic activity is not disrupted by the outbreak of the novel coronavirus, with movement of people rather than goods affected by the closure of points of entry.
This as global markets brace for a recession on Monday as the virus continues to spread worldwide.
An inter-ministerial briefing on Monday in Pretoria adopted several measures to mitigate the negative economic and social impact of the virus.
Trade and Industry Minster Ebrahim Patel told the briefing that since the outbreak of the virus, government has monitored its impact on the global economy, where growth is now expected to be revised downwards with China and Italy, the old and new epicentres of the virus expected to be the hardest hit, along with the rest of Europe, the United States, and parts of Asia including South Korean, Hong Kong and Japan.
Patel said government has particularly monitored the parts of the global economy where South Africa has extensive exposure through exports such as minerals demand from China.
South Africa also has value added exports to the European Union and some preferential access to the United States.
Government has then monitored global supplies of essentials including medical supplies.
The government has also investigated the possibility of industry shutdown as well as an economic slowdown and supply chain disruption to the South African economy.
Patel says government has also assessed South Africa’s domestic industrial capability for the manufacture of surgical gloves, facial masks and protective gear that may be needed during the pandemic should imports be disrupted.
Government was to later in the day meet business and labour at National Economic Development and Labour Council (Nedlac) to thrash out measures that employers should adopt.
Patel said they have also been in consultation with sectors such as food and beverages, automotive, retail and pharmaceuticals to assess availability of supplies and their ability to import.
He said that the industry’s message, especially retail, is that there should be no “panic buying” as there are adequate supplies.
Finance Minister Tito Mboweni announced that a co-ordination Working Group chaired by a Deputy Director General has been set up at the National Treasury and emphasised that “funds will be made available” to contain the outbreak, including taking from programmes throughout government.
“We will not reach a point where we are unable to procure what is needed” said Mboweni
He noted that funds will be made available for the National Disaster Fund.
Mboweni also heads up a team of provincial MECs for finance to direct resources as required.
The committee works alongside the health minsters working with Health MECS from the provinces.
Mboweni said they have had consultation with Financial Regulatory Authorities and banks to discuss ways of how to mitigate financial impact of the virus.
Mboweni did not mention the use of the contingency fund as a mitigation measure.
He also refused to announce how much is available in the Disaster Fund “as this will affect prices” of supplies, he said.
Tourism Minister Mamoloko Kubayi-Ngubane said the sector is bracing itself to take a severe hit this quarter and recover in the next two quarters.
The sector is already reeling from falling tourist numbers in tourist hotspots and the announcement of cancellation of events such as the Cape Town International Jazz festival and the Two Oceans Marathon already affecting tourism in the Western Cape.
The department has already cancelled the Tourism Indaba, which was scheduled for May this year.
Kubayi-Ngubane said the sector is in talks with international meetings organisers and the hosting provinces about rescheduling events and acknowledged that some events have been lost for good, without giving details.
Home Affairs Minister Dr Aaron Motsoaledi announced that the 35 out of 70 ports of entry closed do not have commercial activity and primarily move people and cars, with no customs activity for example, only South African Police Services and Home Affairs.
The only two affected seaport are Saldanha and Mossel Bay, even they are monitored for passenger and crew changes, which are prohibited, rather than freight.
On the transport front, Transport Minister Fikile Mbalula announced that aviation is the hardest hit and front line staff will be supplied with gloves and masks.
Taxis, train and buses will be equipped with screening equipment and sanitisers be provided, Mbalula announced.
Government acknowledged that the outbreak has thus far been confined to the affluent class who afford travel and can adopt measures such as self-isolation, the country must now brace itself for an outbreak in a mass transit public transport and informal settlements.
Government has requested municipalities to provide quarantine facilities should these be required.
The economic fallout from the virus is expected to be severe.
On Monday, the fear of a global recession drove the FTSE 100 on the London Stock Exchange to an eight year low while locally, Nedbank revised growth forecast for South Africa for this year from 0.9% to 0.2%.
On Thursday, the Reserve Bank is expected to cut interest rates following other major Central Banks around the world.
