As measures to mitigate the spread of COVID-19 intensify throughout South Africa, questions concerning the survival of the country’s already constrained economic prospects reign supreme.
Since arriving in South Africa just over two weeks ago, the deadly coronavirus, which has plunged the world into a state of uncertainty and panic, has infected over 100 citizens and led to a “state of disaster” declaration issued by President Cyril Ramaphosa on Sunday.
COVID-19 cripples the economy
In addition to travel bans, school closures and the prohibition of large public gatherings, the rapidly evolving outbreak has triggered clauses in the Disaster Management Act which orders the wholesale closure of establishments in accordance with revised operating times. Bars, clubs, shebeens and restaurants which sell liquor, must close at 18:00.
These latest regulations spell disaster for the hospitality industry, which now joins the long list of coronavirus-related economic casualties alongside the travel and tourism sector.
Economic consequences of the harsh, yet warranted, restrictions have been noted by Ramaphosa. While the spread of COVID-19 is likely to be slowed, South Africa’s tight state of disaster will undoubtedly result in business closures, job losses and severe financial constriction.
Nations react to coronavirus crash
Other nations hard-hit by the coronavirus outbreak and its financial ramifications have undertaken measures to ease the economic fallout.
In the United States (US), for example, the Department of Housing and Urban Development has suspended all foreclosures and evictions while negotiating mortgage breaks. In Denmark, Prime Minister Mette Frederiksen announced that, because of the “domestic lockdown”, the state would cover 75% of employees’ salaries in an attempt to mitigate layoffs and ease pressure on businesses which have seen a decline in production.
Other countries are actively implementing, or at the very least, investigating, similar short-to-medium term solution to the economic conundrum posed by COVID-19.
In South Africa, President Ramaphosa has hinted at the possibility of an economic stimulus package designed to alleviate financial strain. The rollout of said packages, according to Ramaphosa, “will be concluded with business, labour and other relevant institutions” in due course.
EFF Statement on the Division of Revenue Bill and Economic Measures In Times of Coronavirus. pic.twitter.com/Z9kJVMFB73
— Economic Freedom Fighters (@EFFSouthAfrica) March 18, 2020
EFF tables five urgent economic reforms
While South African employers and employees wait with baited breath for Ramaphosa’s stimulus announcement, the EFF have proposed five fundamental financial reforms intended to ease citizens’ burdens.
Home loans
All banks must suspend payment of home loans for four months, and restructure the home loan term of payment. All home loan payments that were made on the 15th and ones scheduled for the 25th of March should be reversed.
Personal loans
All banks must suspend repayment of personal loans, credit cards and overdrafts for a period of four months.
Car loans
All banks must suspend repayment of car loans for four months.
Government grant
Government must pay all workers who earn below R15 000, a once-off allocation grant of R3 500 for food and hygiene essentials.
Service providers
All service providers, such as Multichoice, Vodacom, MTN and others, should suspend debit orders for four months.
Source: The South African Read More
