Hopes rising that bans will be eased
• Ramaphosa may speak on Thursday night • Optimism over return to alcohol, tobacco sales
The bans on the sale of tobacco and alcohol, which have cost the economy billions of rand, will stand out in what is expected to be a further easing of the lockdown when President Cyril Ramaphosa addresses the nation as soon as Thursday evening.
The ban on tobacco sales has been in place for over four months and has cost the country more than R4bn in uncollected excise taxes, while the prohibition on the trade of alcohol, which was reinstated last month, has devastated a R140bn industry, leading to job losses and the world’s largest brewers, AB InBev and Heineken, cancelling or reconsidering investment plans.
Pressure is mounting on Ramaphosa from business and labour to roll back the restrictions, lift the bans and fully open up the economy, which is expected to suffer anything between a 7% and double-digit contraction for 2020.
Business Day has been reliably informed that optimism that the bans are on their way out is not misplaced.
Other economic sectors that are yet to reopen are the tourism and airline industries.
The speculation boosted the shares of wine and spirit maker Distell to their biggest gain in nearly three months, while hospitality and gaming stocks also surged, with City Lodge jumping 11.6% and Sun International rising 8.63%.
It is, however, not clear whether the president will open the skies for foreign travel or allow South Africans to travel around the country for leisure if he moves the country to level 2 of the national lockdown later this week.
The national state of disaster was extended to August 15, which means Ramaphosa will have to announce before Sunday whether it is being extended.
Recommendations on lifting the bans are said to have been taken to the national coronavirus command council. However, the cabinet is yet to meet.
Ramaphosa is expected to meet with the National Eco
nomic Development and Labour Council (Nedlac) on Thursday, which is also likely to call for an end to the ban on alcohol sales.
Business Day understands that recommendations for further easing are based on signs that the aim of the lockdown has been achieved, with the Western Cape, Gauteng and the Eastern Cape having reached the peak of coronavirus infections earlier than expected.
SA’s confirmed Covid-19 cases have risen past 566,000, the world’s fifth-largest recorded caseload, but the number of fatalities reported in the country has fallen significantly for the second week in a row.
Further supporting the case to reopen the remaining 20% of the economy is the latest mortality data from the Medical Research Council, which showed on Wednesday that natural deaths have fallen for the second straight week.
Matthew Parks, trade union federation Cosatu’s parliamentary co-ordinator, said Nedlac would meet with the president, and labour and business would share their views and proposals on SA’s economic recovery.
While the plans would include long-term proposals, it was expected that they would also focus on the immediate needs of the economy.
Parks said that while the government did not really have a choice but to ban the sale of alcohol to ensure that intensive care units were not bogged down by patients with alcoholrelated injuries, one had to take into consideration that the alcohol industry in its entire value chain employed hundreds of thousands of workers.
“We need to save those jobs, especially when you’re in an economy with 40% unemployment,” he said.
Business Unity SA (Busa), a lobby group representing some of the biggest names in SA industry, said the country was in a position to substantially open the economy.
“Gauteng appears to have turned the corner on the virus and although a spike is expected in KwaZulu-Natal, we believe we can manage opening the economy with health directives in place,” Busa CEO Cas Coovadia said.
“The economic impact of ongoing closure of some sectors is severe and there appears little justification for ongoing closure.”
MOVE TO LEVEL 2
Prof Shabir Madhi, an infectious disease specialist and member of the ministerial advisory committee on health, said there was ample opportunity to move the country down to level 2.
But a fairly measured approach on the extent of the opening would be needed and health protocols would need to stay in place. For example, that opening up areas that would in turn lead to overcrowding in poorly ventilated spaces would not be wise and would lead to a repeat of an outbreak.
But to some extent the reality was that the country had already moved to level 2, especially when it allowed for 100% capacity in taxis.
Madhi said that in the end it came down to citizens’ cooperation and behaviour more than the restrictions imposed.
RECOMMENDATIONS FOR FURTHER EASING ARE BASED ON SIGNS THAT THE AIM OF THE LOCKDOWN HAS BEEN ACHIEVED