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The Consequences of Mini Lockdowns

The Consequences of Mini Lockdowns

With mini, or ‘snap’ lockdowns now almost certain for areas of South Africa where Covid-19 infections have seen a sudden spike, economists at the University of Stellenbosch’s Bureau for Economic Research (BER) say this will be bad news for economic recovery in the country.

The BER said that the whole of South Africa is seeing a steady rise in new coronavirus cases, with the seven-day rolling average now at about 2,900 daily cases, from 1,500 cases at the start of November.

This is still off from the 12,000-plus daily cases seen at the peak of the virus in June and July, but is showing a definite trend upwards.

The fresh surge is largely due to the spike in cases experienced in the Eastern and Western Cape, the BER said, with authorities officially characterising it as a resurgence.

“The Western Cape government said that the province is now officially experiencing a resurgence of the virus as active cases jumped by more than 20%, week-on-week. In fact, new cases rose by more than 52% over the past week in the Western Cape with community transmission again established. The province issued a hotspot alert for the Garden Route as well as the City of Cape Town. George and Knysna recorded more new cases than during the peak of the nationwide pandemic in July. Health minister Dr Zweli Mkhize also expressed concern about the number of positive cases as well as rising hospital admissions and deaths from the virus in the Eastern Cape,” the BER said.

While the Western Cape government has made it clear that South Africa cannot afford another nationwide lockdown, it, along with the Eastern Cape, have seriously considered implementing tighter restrictions in hotspot areas – a type of mini lockdown, or snap lockdown, similar to those seen across European cities.  Reports suggest that these lockdowns will probably be level 3 restrictions.

“While in theory, local, or snap lockdowns could be a sensible approach to ensure that a region’s health system can cope with a sudden rise in cases, it will be challenging to implement this in practice – especially ahead of the festive season,” it said. “Furthermore, local lockdowns will be a setback to the economic recovery in those regions.”

Level 3 focused mainly on restrictions on alcohol, leisure travel, social visits and large gatherings.  It will also mean that those who can effectively work from home will be required to do so.  People will be prohibited from leaving their homes except for travel to and from work and for essential shopping and emergencies.  Hotels and accommodation will be closed.

These restrictions will end the upward trend observed in the economy.  South Africa can ill afford further economic decline with several state owned companies barely staying afloat.  “The improvement in business confidence was supported by a broad-based recovery in all sectors included in the index. However, the consumer-linked sectors performed much better than manufacturing and in particular building.

“While this does raise some questions about the sustainability of the improvement, the fact that some growth momentum seems to have been sustained from Q3 to Q4 was heartening,” it said.




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