South Africa has limited firepower to mitigate significant economic fallout from COVID-19

SOUTH AFRICA - Report 02 Apr 2020 by Iraj Abedian

On top of the public health crisis that is likely to take place in South Africa from the growing COVID-19 threat, the economic fallout is going to be momentous. Even as he announced the 21-day country lockdown, President Ramaphosa acknowledged that the economy was going to suffer because of contained activity during the period. As measures to flatten the epidemic curve intensify (i.e., through physical distancing), so do recessionary outcomes as the recession curve is deepened. Nonetheless, these measures are necessary to prevent a national health and a humanitarian disaster. South Africa entered a period of lockdown from midnight March 26, with only essential services still operational. Although this act is expected to assist in averting a demographic health disaster, particularly among a population that has a high proportion of medically vulnerable individuals (due to high rates of HIV and TB), the country was also signing up for a deep recession as workers are largely kept from work and consumers kept from consuming.

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