The economic climate in South Africa changed drastically on March 27, when the country went into lockdown.
In light of the pandemic, Statistics South Africa conducted surveys on the impact of the pandemic on South African business.
The first survey covered the period from March 30 to April 13. While the second survey ran from April 14 to April 30. The second survey contains additional variables or questions that provide further insight into the impact of the COVID-19 pandemic.
The survey scope was also expanded by including the agriculture and hunting sectors. The findings contained in the first and second business impact surveys cover South Africa’s level 5 lockdown period.
According to Statistics South Africa, what kind of impact did the lockdown have on the economy?
Some of the key results reflect the following findings:
- The majority of responding businesses (89,6%) reported that business turnover was below the normal range.
- 8,6% of responding businesses have permanently ceased trading.
- A further 36,4% reported the laying off of staff in the short term.
With the lockdown affecting scores of businesses, the Newcastillian speaks to three politicians to hear their views on Newcastle’s recovery.
Alex Liu of the Inkatha Freedom Party (IFP) explains his views on Newcastle’s recovery are rather bleak.
“Prior to the lockdown, the local economy was already on a downward spiral. Adding recent strikes which are affecting the textile industry, I am concerned about further job loses due to the textile industry already being on the verge of collapse.”
Liu elaborates that if the textile industry does collapse, it will have a knock-on effect, seeing the retail industry also suffer.
With national and local factories finding themselves in a tight position, struggling financially, Liu says the situation hasn’t been made easier due to the activities of certain political parties.
“There is a certain political party which is encouraging the strikes. With only between 20% and 30% of the staff having returned to work and companies not making the same turnover, this kind of behaviour will affect the local economy.”
Matthew Shunmugam of the African National Congress (ANC) says the local economy was not doing as well as it should have, prior to the lockdown.
“With ArcelorMittal, Karbochem and SA Calcium Carbide retrenching people, the local economy was already depressed. Just when these companies started taking the necessary steps to try and save jobs, COVID-19 happened.”
Describing the pandemic as a life-changing experience, Shunmugam says there is a glimmer of hope for economic recovery. Especially since President Cyril Ramaphosa announced that more businesses would be allowed to trade.
Businesses which included the tourism sector, hairdressers, cinemas and restaurants being able to take sit-in orders.
As more businesses are now allowed to operate, Shunmugam says business owners and the community at large need to find some form of balance. This is to try and normalise the current situation.
“Businesses need to start working together. For example, public transport needs to work with fuel suppliers, mechanics and motor dealerships.”
Through various business sectors working more closely together, Shunmugam feels there is hope for an economic recovery.
Bebsie Cronje of the Democratic Alliance (DA) does not have high hopes for the local economy.
Cronje says the number of residents from Newcastle West being able to pay the necessary bills has dropped to between 74% and 75%. A figure which used to be much higher.
“If the Newcastle West cannot fork out the money, there is no way the local economy will be able to improve.”
Furthermore, Cronje says Newcastle Municipality has not mentioned how it will be assisting those who are struggling financially.
“It was suggested that each municipality has its own solidarity fund to assist local businesses. But money has a habit of disappearing in our municipality,” she says.
With a bleak outlook on the local economy, Cronje explains the only way to ensure economic recovery is to look at ways in getting all Newcastillians to pay their relevant accounts. Another possible solution was looking at job creation.
“But how do you create jobs in Newcastle during the current climate,” Cronje questions.
As a community, we hold a lot more power than we know. Unlike large cities, we have the power to pull together and affect realistic and tangible change. Now is the time for the community to unite and work together for a brighter future.
