May 25, 2020

SOUTH AFRICA: Intense exit contestation and a faster reopening from 1 June

BY Anne Frühauf

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( 6 mins)

● On Sunday evening, 24 May, President Cyril Ramaphosa announced that, from 1 June, South Africa’s pandemic risk level would be reduced from the current 4 to 3.

● Although infection rates are still rising, Ramaphosa has made significant restart concessions in response to economic pressure mounting from all sides.

● Most economic activity will be allowed to ramp up (much more so than originally envisaged under “Level 3”), but corporate preparedness will come under increasing scrutiny as a result.

Pandemic picture

With 22,583 Covid-19 cases as of 24 May and comparatively few deaths (429), the Ramaphosa government still considers South Africa’s early and strict lockdown to have succeeded in flattening the country’s infection curve and buying it time to prepare its health response. According to Ramaphosa, this includes repurposing about 20,000 hospital beds and establishing 27 field hospitals.

Yet infections have continued to climb, albeit alongside testing, which reached 9.52 per 1,000 people as of 23 May. Under South Africa’s active case finding approach more than 580,000 tests have been carried out and more than 12mn screenings. These involve nearly 60,000 community health workers going door-to-door to screen and, where applicable, refer for testing and contact tracing, though a debate is emerging over the merits of screening vs testing.

The outlook is challenging. On Sunday, Ramaphosa warned that, with infections expected to rise much faster, “the coronavirus pandemic in South Africa is going to get much worse before it gets better.” The primary model of the National Department of Health (NDoH) and its scientific advisers suggests that:

  • laboratory-confirmed Covid-19 cases will reach an estimated 3.4mn to 3.7mn by 1 November; other projections suggest a total of 13mn of South Africa’s 57mn people could be infected (most without being diagnosed);
  • deaths may rise to between 34,015 and 49,774 cases; and
  • available hospital and ICU beds “will likely be exhausted by July” (South Africa currently has 3,300 ICU beds).

Particularly noteworthy is that the Western Cape has emerged as South Africa’s top Covid-19 hotspot. Of the total of 22,583 Covid-19 cases, 65% are now recorded in the Western Cape. This is partly due to differences in testing strategies between the opposition Democratic Alliance (DA)-run Western Cape and the rest of the country, combined with a phenomenon of cluster outbreaks in the province. While this lends itself to political squabbling, the national ANC government has conceded that the Western Cape scenario could easily repeat itself elsewhere. Given the differing trajectories, cases in hotspots like Cape Town are currently expected to peak around late June, but only around August or September in the rest of South Africa.

SOUTH AFRICA: Intense exit contestation and a faster reopening from 1 June 1

Source: National Institute for Communicable Diseases (NICD), National Covid-19 Daily Report, 24 May

Exit politics

Clearly, South Africa’s gradual lockdown easing is not driven by infection rates. Rather, amid fears that the Covid-19 fallout could result in one of the worst recessions on record, pressure to reopen the economy is mounting from business, labor unions and opposition parties, particularly the DA, which has much to lose ahead of the 2021 local elections.

For its part, big business had lobbied for a reduction to Level 2 as soon as possible. While Ramaphosa’s 24 May announcement did not concede this officially, the reopening envisaged from 1 June looks much more like Level 2 than what had originally been envisaged under Level 3 (which was mainly a gradual increase in manufacturing, mining, construction and retail sectors). This means that in the bargaining and chaos around implementation, specific risk levels and the government’s broader model are fast losing their meaning. On the upside, most business sectors – except the tourism and restaurant industries, and informal sectors – will be pleased with Ramaphosa’s restart announcement from 1 June. This will include a full reopening of all manufacturing, mining, construction, financial services, professional and business services, information technology, wholesale and retail, including malls, and government services.

A broader, faster scaling-up of economic activity may also reduce the risk of proliferating legal challenges against inconsistent and seemingly arbitrary restrictions. These have included restrictions on e-commerce (recently overturned); on the sale of hot cooked food and on specific items of “non-essential” clothing; allowing textiles manufacturers to produce winter clothing only but not spring clothing; or allowing the construction of bridges but not office buildings.

In a step towards rendering South Africa’s pandemic restrictions a little less unpopular with the general public, Ramaphosa announced a decision to allow some alcohol sales, the lifting of the night-time curfew, and to allow exercising at all hours. However, Ramaphosa’s announcement that the ban on the sale of tobacco products would continue will remain controversial. Seemingly driven by Minister in the Presidency Nkosazana Dlamini-Zuma’s personal hatred for cigarettes, the ban’s health rationale has been poorly articulated and has aggravated Finance Minister Tito Mboweni’s fiscal quagmire by contributing to the steep fall in revenues.

Covid-19 “hotspots” are another contested area. These currently include South Africa’s seven largest cities: Johannesburg, Tshwane and Ekurhuleni in Gauteng province, and Cape Town, eThekwini, Nelson Mandela Bay and Buffalo City. Even within the ruling party, provincial leaderships have been resisting the idea that key hotspots could remain under tighter restrictions for longer. Gauteng Premier David Makhura (ANC) had argued that it would be impossible to impose different risk levels for cities in his highly integrated province – which is responsible for about a third of South Africa’s GDP and where the government fears that some 2mn jobs could be lost due to the crisis. In his speech, Ramaphosa cautioned that “should it be necessary, any part of the country could be returned to alert levels 4 or 5 if the spread is not contained despite our interventions.” However, it is not yet clear whether the current hotspots will actually be designated at a higher alert level from 1 June and therefore whether tighter restrictions on business and movement will apply.

With most parts of the economy expected to reopen, the devil will be in the detail of yet-to-be published regulations. The reopening will also shift the onus of implementing health measures onto the corporate sector. Companies will be obliged to develop extensive sanitary and social distancing protocols before they resume operations, including screening on arrival, arranging testing, quarantine provisions and contact tracing. Already, reported Covid-19 cases at mine sites and union complaints about lacking health measures suggest that corporate preparedness will come under ever greater scrutiny as South Africa’s reopening accelerates.

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