The South African National Treasury presented bleak scenarios on the impact of COVID-19 on Thursday, in a briefing in which it outlined the government’s approach to rebooting the economy and detailed its R500 billion stimulus package.
As many as 7-million South Africans could join the ranks of the jobless if large swathes of the economy remain shut until the end of the year, according to a report in the Sunday Times.
In order to curb the spread of COVID-19, the country imposed a 21-day lockdown that was extended by two weeks to the end of April. However, last week President Cyril Ramaphosa announced five-level plan to ease lockdown.
The Sunday Times reported that treasury has warned that more than 2.5-million jobs are at risk even if the pandemic is contained quickly and the economy bounces back.
Jobs in construction and manufacturing will be hard hit, and the trade and accommodation sector, which includes restaurants and hotels, could see more than 1-million job losses in a worst-case scenario.
Over the next month, the state will shift its response to the COVID-19 pandemic by preserving the economy, developing immediate recovery plans and pivoting the economy in a position of growth.
This was revealed by Finance Minister Tito Mboweni on Friday during a press briefing in which he outlined a R500 billion economic support package.
The package was initially unveiled by President Cyril Ramaphosa during an address to the nation on Tuesday.
Concerns about the sustainability of South Africa’s fiscal choices have seen the cost of South Africa’s borrowing increasing faster than other emerging economies.
“The fiscal weakness was present going into the crisis – in particular, rising debt to Gross Domestic Product levels, and the rapid growth in interest costs as a share of total spending, squeezing out spending on other priorities.”