The national lockdown, that came into effect on March 27, was meant to last 21 days.
Five months later, and the latest extension of the National State of Disaster to September 15 notwithstanding, it has no actual end date, since yet more extensions may be gazetted.
Covid-19 has for months shown itself to be considerably less severe than initially feared. Yet the lockdown rules got crazier. E-commerce was banned, despite being the perfect medium for those who feared human contact. Selling warm cooked food in supermarkets was prohibited, but selling cold cooked food was fine. You weren’t allowed to buy open-toe shoes.
Alcohol was banned, unbanned, then banned and unbanned again. And in spite of contradictory ‘evidence’ and with complete disregard for individual rights or any empathy for smokers, tobacco was completely off the table until last week.
Few left untouched
All sectors have been affected in one way or another. The South African tourism, hospitality and entertainment industry has collapsed under the weight of one of the most stringent lockdowns in the world. Even with the latest relaxations, this sector remain subject to costly restrictions.
And it is one of the most stringent and enduring lockdowns in the world.
Whether one considers lockdown regulations as measured by the Oxford University Stringency Index, or the sanction of movement as captured in the Google Mobility data, few people in the world have been locked down longer and harder by their government than the people of South Africa.
This policy has left in its wake a trail of economic destruction. Can the country recover from this?
It is possible.
But for a recovery, policies have to target the very heart of the problem – and that is the lockdown and its numerous restrictions that directly created this economic depression.
Ending the lockdown is, therefore, the first and most critical step to economic recovery.
But even once lockdown ends, society will find itself with fewer savings, having used them up to stay alive.
Without savings, there is no capital to invest, and, without capital, businesses can’t fund the restarting of production or rehire staff.
The recovery plan for South Africa is thus twofold:
- End lockdown
- Restore savings as quickly as possible
Ending the lockdown needs to happen in two ways. Firstly, the government needs to discontinue all lockdown regulations immediately, lift the state of disaster, and allow people and organisations to manage their unique risks by converting all Covid-19 regulations into non-compulsory recommendations.
Secondly, people need to lift the lockdown themselves by claiming back their freedom and acting in accordance with their conscience and their fundamental rights. This action is already building, with millions of small acts of civil disobedience all around the country.
To build savings, households and businesses need clear, rational, work-friendly policies.
Ending the lockdown would be a great start. Once markets open up, households and businesses need other measures that will help them to retain income and save it at low risk for a return above the rate of inflation. The aim is for a savings-rich rather than debt-saturated economy. This is where the focus must now fall.
Russell Lamberti is an economist and founder of ETM Macro Advisors. He serves on the advisory panel for Business for Ending Lockdown.