Government expects lengthy economic recovery period from Covid-19 impact

Minister Mmamoloko Kubayi-Ngubane. Picture: GCIS
Minister Mmamoloko Kubayi-Ngubane. Picture: GCIS

While economic activity is expected to be phased in as from this Friday, government is anticipating that the impact of Covid-19 coronavirus will be felt for the foreseeable future.

Mmamoloko Kubayi-Ngubane, chairperson of the economic cluster in the National Coronavirus Command Council, on Tuesday said government’s economic recovery plan would take six to eight months.

Kubayi-Ngubane said the lengthy plan was preferred as government expects the Covid-19 infections to only peak in September.

With this in mind, the tourism minister said she did not expect most industries to be back to full capacity on Friday but expected workers to be reintroduced to the labour force in a phased, risk-adjusted manner that would not undo the work done by the national lockdown.

The UIF has processed 59 000 employers applications which means that more 862 000 employees will receive their benefits.

Kubayi-Ngubane said the tourism industry globally had been hard hit by the pandemic because of the lockdown and travel bans as such the local industry had not been spared.

She added that although the tourism sector had received R200 million to assist employers and employees, the dispensing of this relief package had been stalled by the court challenge by Afriforum and Solidarity.

Afriforum and Solidarity do not want Broad-Based Black Economic Empowerment to be a factor in the relief of businesses in distress.

Kubayi-Ngubane said the department would be guided by the outcome of the court but stands ready to support the businesses in distress.

The court hearing started on Tuesday with judgment excepted by Friday.

On the mining sector, Kubayi-Ngubane said “the department of mineral resources and energy has issued a directive to all mining operations to ensure safe start-up procedures as the sector prepares to ramp up to 50% of capacity”.

“The directive issued is to ensure compliance with section 5(1) of the Mine Health and Safety Act, which requires that every employer must as far as reasonably practicable, provide and maintain a safe working environment Covid-19 in South Africa.”

Kubayi-Ngubane said the unemployment insurance fund (UIF) has received 103 000 applications from employers and so far R3 billion had been paid out.

“The UIF has processed 59 000 employers applications which means that more 862 000 employees will receive their benefits.”

Kubayi-Ngubane said about 10 000 UIF applications could not be processed due to errors on the forms and the affected companies had already been notified to and asked to resubmit.

“UIF employees are working around the clock to meet the extraordinary volumes of requests. The call centre, which initially had 75 agents, has increased its capacity and now has 400 agents operating the toll-free number [0800 030 007],” said the minister.

Kubayi-Ngubane added that since government announced Covid-19 relief measures, R530 million had been set aside to support small and medium enterprises.

She said the department of small business development, which is administering the funds, announced that the small and medium enterprises relief scheme will support the payroll, rental and utilities over three months.

Small Business Development Minister Khumbudzo Ntshavheni told the same briefing on Tuesday that to date the scheme has approved more than R235 million, protecting more than 11 000 jobs.

Ntshavheni said the spaza shop support scheme, which was launched a week ago, had already received more than 104 applications with 88 already approved.

The Tuesday briefing followed President Cyril Ramaphosa’s announcement on Thursday that the lockdown restrictions would be relaxed to level 4 from this Friday. This would allow limited economic activity. The relaxed regulations include a curfew from 8pm to 5am.

On Saturday, Cooperative Governance and Traditional Affairs Minister Dr Nkosazana Dlamini-Zuma and Trade and Industry Minister Ebrahim Patel provided more clarity on the new regulations.

Details of the level 4 lockdown will be published on Thursday.

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