When President Cyril Ramaphosa moved the country to the second-highest level of the national lockdown a month ago, we lamented his failure to acknowledge the economic harm this would cause and offer appropriate relief to affected workers.
Though he has finally made this right, an old enemy still lurks. And that is the gap in time between official pronouncements and money flowing to businesses and workers. It was in late June that Ramaphosa said the country was moving into level 4 of the lockdown. The measures included a ban on leisure travel from Gauteng.
The alcohol industry has had to endure another month of not being able to trade. Retailers also have been hit by the looting that was sparked by supporters of former president Jacob Zuma protesting against the Constitutional Court’s order that he be imprisoned for contempt of court..
It was only two weeks ago that the government said the relief programme for businesses and workers, called Temporary Employee/Employer Relief Scheme (Ters), would be restored. On Sunday night, Ramaphosa said applications are now open and that the Unemployment Insurance Fund “will facilitate payments as quickly as possible”.
We hope lessons have been learnt from the early days of the lockdown and that the relief — already late in coming — will quickly flow into workers’ pockets.
Ramaphosa cannot please everyone as he seeks to find a balance between limiting Covid-19 infections and keeping the economy going. On the infection numbers alone, a public health argument could be made for still tighter restrictions, yet many businesses would prefer a full opening.
The positivity rate, the percentage of tests that return with a positive result, is about 26%, indicating that it would be foolhardy to think this leg of the crisis has passed. It’s far off the threshold of the World Health Organization’s, which has said that the rate should remain at 5% or lower for at least 14 days before reopening.
It is therefore hard to understand Ramaphosa’s decision to allow indoor gatherings of up to 50 people, just as he was warning about the heightened transmissibility of the Delta variant and the role of such get-togethers as potential super-spreader events. There’s no economic rationale for taking this risk, and it speaks more to the lobbying power of religious groups than anything else.
According to the president, by Sunday the average number of daily new infections over the previous seven days was about 12,000. While that might have been a drop of 20% from the previous week, it’s probably an undercount, and the test positivity is still more than double the rate it was a month ago. When Ramaphosa tightened rules at the end of May, SA had an average of 3,745 daily new cases and a positivity rate of 11%.
For an economy at a different level of development and better able to provide relief to affected businesses, current conditions would surely have justified tighter restrictions and a continued ban on indoor dining. SA has to depend on individuals and businesses acting responsibly.
On a humanitarian level, we welcome Ramaphosa’s steps to shield the most vulnerable through the extension of the temporary income grant for the poorest until March 22. The alcohol sector was also given relief in the form of a deferment in excise duties for three months, which will provide real cash flow relief, even if it’s a drop in the ocean relative to the losses imposed on the sector.
Other tax-relief measures will also give businesses much needed breathing space. What’s less clear is the fiscal impact of the new promises. The revenue boom from mining might pay for a temporary grant easily enough, but history suggests the pressure to extend these measures will be irresistible.
We await finance minister Tito Mboweni’s comments with some anticipation.
Talk of trade-offs was noticeably absent in Ramaphosa’s speech. Unfortunately, in the real world, tough decisions about reorganising spending cannot be avoided. And, while there has been some progress, talk of reforms to create a fast-growth economy largely remains that.
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