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By Loni Prinsloo and Antony Sguazzin 
1h ago
JOHANNESBURG – South Africa needs to end a blockade in a matter of weeks or Africa’s most industrialized economy could suffer up to four million jobs and contract by 16% this year, the nation’s leading business group said.
The country lacks the financial resources to resist the prolonged closure of companies, said Martin Kingston, head of the Business for South Africa economic task force, which represents the country’s largest business organizations. Security protocols must be established and commerce must restart, he said in an interview.
The government forced most companies to close on March 27 in an attempt to curb the spread of the coronavirus. The restrictions were marginally reduced on May 1, with a change to so-called Level 4 of 5, and key industries like mining are only operating at partial capacity. The borders have been closed except for limited cargo and the number of people queuing for food packages is growing.
A business confidence index reached its lowest level in April since the South African Chamber of Commerce and Industry began compiling it in 1985.
“We are not like the European Union, or the United States or China, Japan” and we cannot endure a lengthy process, Kingston said. “We are talking about weeks, not months, to beat the levels. We aspire to that as a business. ”
South Africa has been praised for limiting known infections, the first of which was confirmed on March 5 at 8,232 so far. The blockade has helped buy time for health services to prepare for an expected increase in cases. The government has said that its risk adjustment approach to reopening the economy takes six to eight months.
While authorities have not indicated when controls could be further loosened, Salim Abdool Karim, an epidemiologist and chairman of a ministerial advisory group on the outbreak, told reporters on Wednesday that keeping the economy almost completely closed after May 1 did not It would have served a lot. .
Government departments will need to align their views and decide the best way to run the economy, Kingston said, adding that companies are eager to cooperate and help raise funds. Sacrifices will be necessary, he said, referring to an ongoing debate on whether to try to keep the bankrupt national airline, South African Airways, afloat.
Businesses will also have to tighten their belts and may need to reduce the gap between management and workers’ wages, and consider reducing dividend payments to conserve resources, he said.
“We are going to have to embark on a steeper path of inclusive and sustainable growth,” he said. “We cannot expect people to enjoy the lifestyles they have had until now in a post-Covid-19 era.”
BLOOMBERG
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