On 28 December, President Cyril Ramaphosa announced a return from ‘Level 1’ to ‘Level 3’ lockdown restrictions, which will apply until 15 January. While the government has been extremely reluctant to return to tighter measures in the face of extreme economic and fiscal travails, the latest pandemic trends have left the Ramaphosa administration with little choice. Yet the fresh Level 3 measures are likely late and still relatively light compared to the economy-wide Level 5 shutdown of Q2 this year.
On Sunday, 27 December South Africa surpassed the one-million mark of cumulative Covid-19 cases. Indicating the severity of the latest surge, the daily average of new infections reached 11,700 cases last week, a 39% increase compared with the previous week and seemingly putting South Africa on course to surpass its July infection peak. Ramaphosa attributed the surge to three main reasons: the seemingly more contagious new Covid-19 variant (501. V2); year-end super-spreader events and social gatherings; and a broader public failure to adhere to basic precautions like mask-wearing.
In response, the government is re-imposing ‘Level 3’ lockdown restrictions, albeit with various adjustments. These include a 14-day ban on all indoor and outdoor gatherings, except for small funerals and commercial premises like restaurants which may continue to operate subject to detailed regulations. The night-time curfew will be extended from 9pm to 6am. To ensure compliance with mask-wearing, Ramaphosa announced the drastic measure that, from now on, every individual will be legally responsible for wearing a mask in public; failure to do so will result in a fine or imprisonment of up to six months. Another unpopular measure will be a ban on the sale and distribution of alcohol, citing both increased Covid-19 transmission associated with alcohol consumption and alcohol-related accident rates.
In his address, Ramaphosa was at pains to stress that the “adjusted Level 3 regulations will keep the economy open while strengthening measures to reduce transmission.” Indeed, the latest measures still appear to be relatively lenient compared with the severe economic shutdown earlier in 2020, no doubt because another stimulus package is fiscally impossible. Other than the liquor industry and parts of the hospitality sector, all economic sectors – particularly mining, manufacturing and financial services – are technically allowed to continue operating subject to health regulations.
Also noteworthy is that the Ramaphosa administration has refrained from re-imposing a ban on inter-provincial travel, despite the fact it has now declared 22 districts across six of South Africa’s nine provinces as Covid-19 hotspots, where tighter restrictions apply. Given typical travel patterns over the holiday period, domestic travel restrictions would appear to be an obvious step to reduce the risk of transmission and overburdening public and private hospitals, particularly in South Africa’s economic hub, Gauteng.
Yet given the depth of this year’s recession, fresh pandemic restrictions in any form cast doubt over the National Treasury’s economic recovery expectations (projected at 3.3%) for 2021. The outlook may be worsened by power shortages and an anticipated slow rollout of Covid-19 vaccines, with the first batch of vaccines under the Covax scheme only expected by Q2 2021.