Economy is in deep trouble under level 4

THE adjusted level 4 lockdown would slow down South Africa’s economic recovery and threaten job security, said experts this week.

On Sunday, President Cyril Ramaphosa placed the country on a level 4 lockdown following the rise in Covid-19 infections and deaths.

He said the more contagious Delta variant of the virus was detected in five provinces.

Gauteng now accounts for more than 60% of new cases in the country.

The lockdown regulations, which will be reviewed after July 11, were gazetted on Monday.

They include:

♦ The ban of alcohol (both on and offconsumption).

♦ The adjusted curfew is from 9pm to 4am with closing time at 8pm.

♦ There is no sit-down service but takeaways and deliveries are allowed.

♦ Gyms, casinos and leisure facilities are unable to operate.

♦ Hotels, lodges and bed & breakfast venues may operate at 50% capacity. They can offer room service and delivery of food.

♦ Schools and higher education institutions will close for contact classes from today. However, Early Childhood Development centres remain open.

♦ All gatherings are prohibited except for funerals (only 50 people permitted), workplaces and shopping.

♦ Leisure travel to and from Gauteng, the Covid-19 epicentre, is banned.

Dawie Roodt, an economist, said the regulations were devastating to the leisure and entertainment sectors.

“They will have to take an even harder knock. The situation for this sector is now gone from bad to worse and it will leave a huge impact. The reality is that most businesses will suffer and employers will have to downsize on staff, which means more people will be unemployed. Our economy is in deep trouble.”

He said the government should support businesses with a grant but there was no more money for this.

“They could also take money from the South African Reserve Bank (SARB) but they are already using the money from the SARB, so the situation is really bad.”

Azar Jammine, a fellow economist, said: “Some businesses will be able to survive and some won’t. It’s the harsh reality.

“We can just hope that the two weeks will be enough and they can reopen again and operate as normal.”

He said employers should try to negotiate payment with their employees and explain the financial knock they are taking due to the pandemic.

Nigel Ward, the president of the Durban Chamber of Commerce and Industry NPC, said: “The overall blanket approach that was presented by our president has been a devastating disappointment, as KwaZulu-Natal has been relatively steady when we examine the statistics.

“The adjusted level 4 lockdown rules and regulation implementation will affect each province differently and this will have a negative impact as each province is different. The new adjusted alert level 4 lockdown will again put the economy under distress and more pressure.”

He said as it stood, several business owners were still recovering from the first lockdown and others have closed.

Restaurant and gym owners and managers, as well as cinema executives, shared their views on the adjusted lockdown.

Das Naidoo, the owner of Mozambique restaurant in Morningside, said: “The new regulations are not beneficial and have hindered our services. My business has been running for the past six years. We survived the first and second lockdowns.

“However, the third one is hard-hitting. Sit-downs generate a large income as compared to takeaways, which are slow with our sales. The new regulation interrupts our cash flow and also the decline in sales affects our monthly budget. We are still working on a skeleton staff but their jobs are safe.”

He said their landlords were sensitive to the situation.

Nitraj Dondee, the manager of Jaipur Palace, said: “Our restaurant is popular for its buffet but with the new regulations business has been bad.

“The take-away, which is usually busy on holidays, has been unusually quiet.

“The morale of the staff has dropped, and they are stressed about what the coming months will bring about.

“From previous experience, we were expecting a small drop in foot traffic but the current move to level 4 has had a worse impact than we anticipated.

“We have implemented short-time wherever possible and kept the minimum number of staff without jeopardising our service.

“We have already observed numerous cancellations for special occasions and we expect things to get worse as the numbers (infections and deaths due to the virus) increase.”

Donavan Pillay, the owner of The

Rock Gym in Chatsworth, said they were still paying off their rental debt incurred from the first lockdown. The facility, which is three years old, has 1 200 members and the membership has been affected.

“We have about 15 staff and now cater for 500 members. We did not get a discount on our previous rentals that were due. Now, with the latest closure, we will have landlords still demanding rentals.

“Members have already asked that their bank accounts not be debited. Income will be tremendously stifled. This affects all operations of our business from rental to salaries.”

Gillian Elson, the head of marketing at Planet Fitness, said: “While we support efforts to curb the spread of Covid-19, limiting numbers in health and fitness clubs is not sustainable for any business over a long period of time.

“We are limited with numbers of members being able to attend clubs at any one time despite the huge demand. In the long run, the limitation of members we are able to accommodate causes strain on the business.

“There have been no abnormal job losses at Planet Fitness.

“The company has taken a view to retaining all staff, as people are core to our business.”

She said an online option to use freeto-use workouts on the Planet Fitness website was produced to help members during the different stages of the lockdown.

Meanwhile, Motheo Matsau, the acting chief executive of Ster-Kinekor, said they welcomed the decision but they hoped cinemas were allowed to open under stringent measures. He said there could have been a workable solution rather than shutting down the industry completely.

“We stand in support of the safety and well-being of our employees and the communities we serve. We have proven to be capable of trading safely. No infections have been traced back to cinemas.”

He said Ster-Kinekor had to file for business rescue due to last year’s closure.

“We are still recovering. Hundreds of our employees have lost their jobs and this current lockdown will result in more job losses.”

Chantelle Burrows, the marketing and content executive at Nu Metro Cinemas, said the lockdown would once again have a detrimental effect on the industry.

“The cinemas were starting to experience an encouraging increase in attendances with the availability of strong blockbuster movie releases.

“We are confident that customers will return when we are again allowed to reopen, to continue the good results achieved to date.”

Some of the movies affected by the temporary closure included Marvel Studios’ Black Widow, The Ladybug and Séance.