COVID-19: Monetary Aid: Governmental Financial Assistance

COVID-19

MORE THAN JUST A RELAXATION OF THE LOCKDOWN NEEDED

OPINION PIECE
by Gerhard Papenfus

Government has given notice of a partial opening of the economy and is currently considering the finer details in this regard.

This arrangement, however, has the potential of aggravating the current levels of frustration, instead of bringing relief.

The economy does not operate in sectoral silos. All economic activity is intertwined. The age-old ‘lock-and-key’ comparison is appropriate; the key serves no purpose without the lock; similarly the lock is of no value without the key.

The activities defined under levels 3 and 4 are equally intertwined and the efficiency of those starting on 1 May will be severely hampered without the contribution of those who are not allowed to open. Opening level 4 without opening up level 3 amounts to a breach in the supply and demand chain.

We have been made aware of many examples illustrating how impractical this arrangement is:

• a particular business specialises in the supply of trucks and trailers to supply chain providers, many of which operate within the defined essential services categories. However, neither of these items can be delivered in the absence of operating test centers (which are not allowed to function) where ‘certificates of fitness’ are issued to enable valid release of these vehicles onto the road;
• another example is hunting, a substantial contributor to the South African economy. Hunting will be allowed from 1 May; however, accommodation is still prohibited. Normally a hunt commences very early and ends after sunset. This implies that the traveling to and from a specific location, in the absence of accommodation facilities, has to be conducted in the dark, which is not allowed in terms of lockdown rules. Therefore, without resuming ancillary arrangements, the benefit of allowing hunting is severely undermined; and
• the manufacturing of construction material is also allowed from 1 May. However, the Construction Industry is only partially opened, and mainly in respect of public works projects. It is simply counterproductive to open the manufacturing of construction material but not construction itself. In this regard, and in terms of health considerations, we may perhaps take advice from Italy where construction is one of the first activities that they will declare open as soon as their lockdown ends.

The human resources factor in a phased opening must also not be overlooked. Employees, only partially paid or in many cases not paid at all, are already experiencing immense strain. In terms of a lockdown scenario, an employer will have to decide who will be allowed to work and who not, which will aggravate an already very tense situation generally, but also negatively impact, not only the employer/employee relationship, but also the relationship between employees.

The increased risk (if any) is not worth a half-hearted reopening which will further jeopardize the livelihood of millions of South Africans.

In view of the impracticalities of the current phased-in approach, we call on government to incorporate level 3 into level 4 in order to mitigate the devastating impact of the current state of disaster, and the resulting lockdown, on the economy and consequently on human lives.

For more information:

NEASA Media Department
Marietha Thirion
marietha@neasa.co.za

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