Brace for 200 000 more job losses if SA moves back to lockdown level 3 - business lobby

A move to lockdown level 3 from mid-November and December could result in 200 000 more job losses and a 10.6% decline in GDP, says B4SA (Photo by Gallo Images/Dino Lloyd)
A move to lockdown level 3 from mid-November and December could result in 200 000 more job losses and a 10.6% decline in GDP, says B4SA (Photo by Gallo Images/Dino Lloyd)
  • If we move to lockdown Level 3, amid fears of a second wave of Covid-19 infections, SA's economy could shed 200 000 more jobs.
  • B4SA estimates it would take until 2024 for formal employment levels to return to the pre-Covid levels of employment, if the correct measures are taken.
  • Government needs to provide certainty that there will not be another hard lockdown to restore and boost investor and consumer confidence.


Another hard lockdown would be detrimental to the SA economy, a shift to lockdown Level 3 in particular would result in 200 000 more job losses, warned Business for South Africa.

The business lobby, representing the majority of SA businesses partnering in their response to Covid-19, on Tuesday issued a statement calling for certainty that government would not implement another hard lockdown amid fears of a second wave of Covid-19 infections.

In the second quarter 2.2 million jobs were shed, as a result of the hard lockdown (lockdown level 5) which lasted five weeks. Economists expect these job figures to recover during the third quarter, coinciding with the easing of lockdown restrictions. 

The South African economy is expected to contract anywhere between 7% and 13% this year- its worst performance in 90 years.

B4SA warned that bankruptcies of small and medium enterprises, which increased from 4% last year to 6.5%, could reach over 10% - this as credit extensions and tax relief expire.

"If all nine provinces remain on Alert Level 1 – the lowest alert level – B4SA estimates a 9.3% decline in GDP for 2020," the statement read. This figure accounts for the fiscal and monetary policy interventions as well as the Temporary Employee Relief Scheme benefit.

One of its downside scenarios which considers SA moving to lockdown Level 3 from mid-November and December – sees a further 200 000 job losses and a 10.6% decline in GDP for the year.

"We estimate that formal job losses have already reached 1.4 -1.6 million, with a further one million lost in the informal sector, and that it will take until 2024 for formal employment levels to return to the pre-Covid level of employment assuming that we pivot the economy onto a sustainable inclusive growth path," said B4SA's steering committee chair Martin Kingston.

"South Africa can ill afford additional job losses and compounded economic difficulty," he added. 

B4SA said certainty that there will not be another hard lockdown would help restore and boost investor and consumer confidence.

B4SA has suggested that instead of a hard lockdown government implement targeted interventions by sector. For example, all industries should remain operational – unless specifically identified as "uniquely high risk".

Other measures include limiting the numbers of people at social and religious gatherings, and possibly reintroducing an extended curfew. "Reintroducing cigarette or alcohol bans should be avoided due to their significant adverse economic effects," B4SA said. Appropriate behavioural and safety protocols must also be applied to mass public transport.

Kingston said: 

"The primary lever we have to reduce transmission is behavioural change: this has already lowered infections. Until an effective and widely available vaccine is found, we will need to learn to live with the virus. By working together on appropriate measures, we can ensure that the spread of the virus is contained without the devastating impact on the economy and jobs that was experienced following the first hard lockdown."


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