Potential Economic Impacts of COVID-19 on South Africa
After a brief period of surveillance and assessment, South Africa adopted two main responses to the novel coronavirus (COVID-19):
- First, it encouraged self-isolation and social distancing. All schools were required to close on 18 March 2020.
- It then implemented a tighter lockdown on 27 March 2020, initially lasting twenty-one days. Most industries were legally required to cease production unless work could be done remotely from places of residence.
The government then extended the lockdown to the end of April, a total of thirty-four days. It made no adjustments to the regulations affecting the movement of people or business activities.
On 21 April 2020 the government announced a large economic stimulus plan to ameliorate the economic impacts of the lockdown. Valued at approximately R500bn (USD $26bn), it equates to roughly 10 percent of GDP (2019, nominal) and approximately 25 percent of the 2020–2021 national budget, announced in late February. It is also larger than the latest official central bank forecast for 2020 GDP growth, which stands at −6.1 percent (but does not account for the new stimulus package). Over 20 percent of it will come from reallocations of the existing budget, meaning that other government spending priorities will lose out.