Failing to pull together: South Africa’s troubled response to COVID-19

Wim Naudé (RWTH Aachen University, Aachen, Germany; IZA Institute of Labor Economics, Bonn, Germany; MSM, Maastricht, The Netherlands and African Studies Centre, University of Leiden, Leiden, The Netherlands)
Martin Cameron (Trade Research Advisory (Pty) Ltd., Pretoria, South Africa)

Transforming Government: People, Process and Policy

ISSN: 1750-6166

Article publication date: 4 January 2021

Issue publication date: 23 June 2021

677

Abstract

Purpose

This paper aims to provide a country case study of South Africa’s response during the first six months following its first COVID-19 case. The focus is on the government’s (mis-)management of its non-pharmaceutical interventions (NPIs) (or “lockdown”) to stem the pandemic and the organized business sector’s resistance against the lockdown.

Design/methodology/approach

This paper makes use of a literature review and provides descriptive statistics and quantitative analysis of COVID-19 and the lockdown stringency in South Africa, based on data from Google Mobility Trends, Oxford University’s Stringency Index, Johns Hopkins University’s COVID-19 tracker and Our World in Data.

Findings

This paper finds that both the government and the business sector’s responses to the COVID-19 pandemic have been problematic. These key actors have been failing to “pull together,” leaving South Africa’s citizens in-between corrupt and incompetent officials on the one hand, and lockdown skeptics on the other. This paper argues that to break through this impasse, the country should change direction by agreeing on a smart or “Goldilocks” lockdown, based on data, testing, decentralization, demographics and appropriate economic support measures, including export support. Such a Goldilocks lockdown is argued, based on available evidence from the emerging scientific literature, to be able to save lives, improve trust in government, limit economic damages and moreover improve the country’s long-term recovery prospects.

Research limitations/implications

The pandemic is an unprecedented crisis and moreover was still unfolding at the time of writing. This has two implications. First, precise data on the economic impact and certain epidemiological parameters was not (yet) available. Second, the causes of the mismanagement by the government are not clear yet, within such a short time frame. More research and better data may be able in future to allow conclusions to be drawn whether the problems that were besetting the country’s management of COVID-19 are unique or perhaps part of a more general problem across developing countries.

Practical implications

The paper provides clear practical implications for both government and organized business. The South African Government should not altogether end its lockdown measures, but follow a smart and flexible lockdown. The organized business sector should abandon its calls for ending the lockdown while the country is still among the most affected countries in the world, and no vaccine is available.

Social implications

There should be better collaboration between government, business and civil society to manage a smart lockdown. Government should re-establish lost trust because of the mismanagement of the lockdown during the first six months of the pandemic.

Originality/value

The outline of the smart lockdown that is proposed for the country combines NPIs with the promotion of exports, as a policy intervention to help aggregate demand to recover. The paper provides advice on how to resolve an impasse created by mismanagement of COVID-19, which could be valuable for decision-making during a crisis, particularly in developing countries.

Keywords

Citation

Naudé, W. and Cameron, M. (2021), "Failing to pull together: South Africa’s troubled response to COVID-19", Transforming Government: People, Process and Policy, Vol. 15 No. 2, pp. 219-235. https://doi.org/10.1108/TG-09-2020-0276

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited


1. Introduction

The COVID-19 pandemic has placed “solidarity in the spotlight” (Visvizi and Lytras, 2020a, p. 125). Nowhere is this perhaps more starkly illustrated than in the case of South Africa’s responses in the first six months after its first COVID-19 cases were diagnosed, in March 2020. The South African case is one of tragic lack of solidarity, in particular of lost trust in government’s ability to manage the crisis, and of an inappropriate backlash by the organized (“big”) business sector. Caught between “bureaucrats in business” on the one hand, and lockdown skeptics on the other, the initial COVID-19 experience of South African citizens were among the worst in the world.

The consequences of this may be likely to felt for a considerable period into the future, unless government and the business sector could pull together in an appropriate response to help the country avoid the health and economic ravages of the pandemic and accelerate recovery. It is important that government and business gets the management of non-pharmaceutical interventions (NPIs) (“lockdown”) right, as there is at the time of writing no vaccine available, plus, the likelihood of future pandemics, perhaps even more horrific than COVID-19, remain likely.

South Africa’s lockdown was imposed soon after its first cases of SARS-CoV-2 virus infection (which causes the COVID-19 disease) were confirmed at the beginning of March 2020. Six months later, the organized (big) business sector called for it to be lifted – not just relaxed or made more flexible – but to be altogether ended[1]. This backlash is unprecedented, as “For the first time since 1994, South African business has, in a public and dramatic manner, broken with government” (Katzenellenbogen, 2020). Moreover, the backlash against the lockdown comes at a time when the country does not yet have COVID-19 under control. In fact, by the end of August 2020, there had been 622,551 confirmed cases and 13,961 deaths [2]. This placed South Africa in the ten most affected countries in the world, in 6th position after the USA, Brazil, India, Russia and Peru.

This situation does not bode well for either the health or economic prospects of its citizens, as the COVID-19 pandemic broke out when the South African economy had not yet even fully recovered from the shock of the 2009/2010 global financial crisis. Between 2009 and 2019, average GDP growth was a paltry 1.4%. By 2019, GDP per capita was at US$7,345, actually lower than it was in 2008. In March 2020, just as the first COVID-19 cases were diagnosed in the country, it also lost its investment-grade credit rating. By July 2020, the expectation was that in 2020, the South African economy will contract by −7.2%, if not more. The OECD (2020) considered a scenario where the contraction could be around −8.2%.

The country had in effect, lost a first battle against COVID-19 by mid-2020. In this paper, it is found that both government and the business sector’s responses contributed to this outcome. Government managed it poorly, and business has shown little understanding of the health and economic necessity of NPIs. The poor management of the lockdown is not a reason to scrap it altogether or to avoid lockdown measures in the case of second or even more future waves (and future pandemics). The government should manage it better, and business should understand that there is no dichotomy between health and economics. In this light, this paper furthermore makes a concise case that a smart and flexible lockdown (called a “Goldilocks” lockdown), based on data, testing, decentralization, demographics and appropriate economic support measures, including export support and a greater emphasis on demand-side stimulation, can save lives, as well as improve trust in government, limit monetary damages and reduce long-term costs. The lessons from South Africa may be relevant for other developing countries where issues of solidarity and trust may hamper the proper management of COVID-19 containment and recovery strategies.

The rest of the paper is structured as follows. In Section 2, the South African Government’s response to the pandemic is dissected. In Section 3, the business sector’s response is critically reviewed. In Section 4, a short and basic outline for a smart – Goldilocks – lockdown is provided. Section 5 concludes the paper.

2. From praise to protest

The South African Government’s response to the pandemic started seemingly well. After the first confirmed case on March 5, 2020, and with only two deaths, the country instituted a stringent lockdown on 26th March, overseen by a National Command Council (NCC) (Mukandavire et al., 2020; Nordling, 2020; Vandome, 2020). It also started testing for COVID-19 infections: by mid-August 2020, almost 3.5 million tests were carried out. The health sector is collaborating with the Jenner Institute at Oxford University on the development of a vaccine: human trails have already started (Oliver, 2020a). Furthermore, a ZAR500bn (US$26bn) fiscal emergency response, which included a Social Relief of Distress Grant [3] was made available in April to limit the economic fallout (DNT, 2020a). This fiscal response amounts to 6.5% of GDP and is one of the most substantial fiscal response packages among developing countries (Bhorat et al., 2020).

By April 2020, the government’s response was hailed as more efficient than that of “many other countries in the world” (Harding, 2020) and that the country is “a lesson to the world” (Vandome, 2020). And in May 2020, Oliver (2020a) declared that “South Africa seems to have done better than most” and that “the country is experiencing a tentative feel-good bloom over its ability to pull together.”

Three months later, the “feel-good bloom” was well and truly over, and the country had failed to pull together. Two reasons are, first, the government’s mismanagement of the lockdown and, second, the economic collapse in the country. The government’s mismanagement was evident in several problems. These include failure to prevent massive corruption in the allocation of COVID-19 relief funding (Myburgh, 2020). At the time of writing, around 600 corruption cases involving the COVID-19 relief grant are being investigated, and the government has prioritized addressing the issue (Oliver, 2020b). The country is now perhaps the only one in the world with a COVID-19 Tender Tracker [4] to trace who is making money from the pandemic.

The government’s mismanagement was also evident in the brutality with which the South African police enforced the lockdown – for instance, over 230,000 people were arrested for violating lockdown measures, including being jailed for “smoking a cigarette without a slip to prove historic purchase” (Haffajee, 2020b).

It was furthermore evident in the degeneration of lockdown policies into often downright irrational, illogical policies – such as “whether people could buy closed or open-toe shoes” (Haffajee, 2020a), a blanket ban on alcohol and tobacco sales and in the discriminatory allocation of emergency funds [5].

Bizarrely, and perhaps uniquely in the world, Ebrahim Patel, the Minister of Trade and Industry, supported bans on e-commerce activities, arguing that if this were not done, it would “be unfair to brick and mortar retailers” (Bateman, 2020). Elsewhere in the world, the economic impacts of lockdowns were mitigated by an expansion of e-commerce. Moreover, it will be the case that the pandemic will accelerate the digitization of business and trade (Bloom et al., 2020). Patel’s alleged hampering of e-commerce, thus not only limits mitigation over the short-term but is potentially also constraining South Africa’s longer-term recovery in a more digital, e-commerce world post-COVID-19.

The government also then prematurely relaxed the lockdown somewhat in June, in the face of infections continuing to grow exponentially during June and July (see Figure 1). In Appendix 2, the stringency of the lockdown together with the percentage of excess deaths are plotted, showing that while total deaths were below the long-term average for the period just after the imposition of the lockdown, it subsequently increased to excess deaths 65% higher than expected, following the relaxation of the lockdown beginning June.

Let us, however, be clear that the problems that characterized the government’s handling of the lockdown mentioned above should not cast a shadow on efforts and commitments of the country’s health sector and health-care workers generally. The health sector has, despite resource constraints and the irrational measures imposed by the government in a top-down fashion, put in a heroic effort. This is evident already, as mentioned in the relatively large number of tests performed and the participation in international vaccine trails. Especially noteworthy are the achievements of community health workers, who had by June already screened more than 11 million people for COVID-19, going house-to-house in high-risk communities (Karim, 2020).

The shortcomings though are that the health sector is negatively impacted, by among others, the mismanagement of its anti-COVID-19 funding (see above), governments’ procurement policies for personal protective equipment which favors international suppliers and price, not quality (Curren, 2020), as well as the fact that large proportions of the population still lack access to health services because of the absence of universal health coverage (van den Heever, 2020).

The problems characterizing the government’s response had, however, one predictable result: massive erosion of trust in government, which before the crisis was already precarious (Zolfaghari, 2020). One immediate consequence had been the sharp rise in public protest actions (Lancaster and Mulaudzi, 2020). In July, 232 protest actions took place, an average of 8 a day, significantly more than the daily average of 1 protest per day in 2018 and 2.5 in 2019. As the Institute for Security Studies noted, the single most important reason for these protests was against the brutal handling of the lockdown by the police (Lancaster and Mulaudzi, 2020). Protests were also often sparked by “a specific betrayal,” such as promised food parcels that were not delivered (Anciano et al., 2020). Only a small proportion of protests (2%) were against rising unemployment.

3. From lukewarm to backlash

Big business was initially at most lukewarm about the lockdown, declaring its support for the government and pledging adherence to the measures as a signal of solidarity. Each successive easing of the lockdown was greeted with applause (Cohen, 2020). By May, however, the big business sector had become antagonistic toward the country’s lockdown. As put by Katzenellenbogen (2020):

For the first time since 1994, South African business has, in a public and dramatic manner, broken with government. Business is saying that it has had enough of a lockdown approach that is laying waste to the economy.

Subsequent to the break with the government, a “Business for Ending Lockdown” (B4EL) campaign was launched [6] demanding the lockdown to be completed lifted – not eased or adjusted, but altogether removed. By early September 2020, the campaign claimed to have received the endorsement of more than 50,000 businesses and 3,500 individuals. The campaign declared the lockdown to be:

[…] a humanitarian disaster and a grave threat to lives and livelihoods. The harms will far exceed even the most pessimistic Covid-19 scenarios […] forced and sustained lockdowns have fast become one of the biggest threats to the future of the country.

What this statement failed to reflect is that it is COVID-19 that is a “threat to the future of the country” and not as such the lockdown measures. Lockdown measures, or NPIs in more formal terminology, are the recommended scientific approach to contain a pandemic (Ferguson et al., 2020). As Anderson et al. (2020, p. 932) stress, in the absence of a vaccine:

[…] what is left […] is voluntary plus mandated quarantine, stopping mass gatherings, closure of educational institutes or places of work where infection has been identified, and isolation of households, towns, or cities.

Several scientific studies have confirmed the efficiency of lockdowns to reduce the spread of the SARS-CoV-2 virus (Hou et al., 2020; Vinceti et al., 2020). According to Salim Abdool Karim, Chair of the Scientific Advisory Committee to the South African Department of Health, the lockdown measures that were taken in South Africa extended the time that it took virus infections to double, from 2 to 15 days (Nordling, 2020; Karim, 2020). Bhorat et al. (2020) also concluded that after the imposition of the lockdown, the transmission of the disease slowed down. This is reflected in Figure 1 in the rate of growth in infections slowing down: the slope of the logarithmic plot is less steep after the end of March. It may also be reflected in Appendix 2 (Figure A1) in the fact that the excess death rate turned negative in April 2020.

Furthermore, Russel Lamberti, one of the all-male panel of advisors to the “Business for Ending Lockdown” claimed [7] that “few people in the world have been locked down longer and harder by their government than the people of South Africa” and that it is “the lockdown and its numerous restrictions which directly created this economic depression.” But both of these statements are misguided, as we will argue below.

While South Africa’s lockdown has been problematic, as was shown above, the lockdown has not been longer and harder in South Africa than in most countries. According to Oxford University’s Stringency Index [8] at least 77 countries had lockdowns that were more stringent than that of South Africa. South Africa’s lockdown is not even the strictest in Africa: countries such as Angola, Kenya, Congo, Rwanda, Madagascar, Seychelles, Tunisia, Morocco and Uganda, all have had lockdowns more stringent at times. South Africa even prematurely eased its lockdown in June 2020, with the number of cases growing exponentially (see Figure 1), the reproduction number (R0) at 2.95 still far above 1 (Mukandavire et al., 2020) and the percentage of excess deaths rising (see Appendix 1). Among the ten most affected countries in the world, South Africa’s lockdown was, while strict, not the most severe, neither in terms of the stringency of the lockdown as measured by Oxford University’s Stringency Index, nor by the decline in the mobility of its population as measured by Google Mobility Trends; see Appendix 1 for more details.

Business is also not correct to blame the local lockdown alone for the “economic depression” the county fell into, which includes the contraction of the economy by an expected −7.2%, an increase in unemployment of 3 million people (Spaull et al., 2020) and a fall in business confidence levels to its lowest in 45 years (Naidoo, 2020). These economic impacts are horrendous. But business is not correct in ascribing the lockdown as the sole reason for the disaster. Even if there would have been no lockdown in South Africa, the country would simply still have experienced its worst recession in living memory for the simple fact that the global economy is in its worst recession in living memory. South Africa is a very open economy. It has an economic structure that makes it more susceptible to the kind of shock that COVID-19 has brought, and the economy was in troubled waters even before the pandemic broke out. The International Monetary Fund estimated that the world economy will shrink by 4.9% in 2020 (IMF, 2020) and the Organisation for Economic Co-operation and Development estimated that it would shrunk by 6% (Boone, 2020). The economies of virtually all of South Africa’s trading partners shrunk dramatically in 2020 – the euro area’s GDP according to estimate shrunk by −9.1% (World Bank, 2020).

In the 2009/2010 global financial crisis, which was not caused by South Africa, the country still suffered a significant decline in economic growth – as Figure 2 shows – from which it had barely started to recover from. Moreover, by 2019, GDP per capita was at US$7,345, actually lower than it was in 2008. So, the country has to face a global crisis much worse than anything that has come before (WorldBank, 2020) with a battered economy. Given these circumstances, it is inconceivable that the COVID-19 pandemic would not have a terrible impact on South Africa’s economy.

Will not having implemented a lockdown, or prematurely ending the lockdown, reduce the extent of the unavoidable recession? Perhaps somewhat, although the lifting of the lockdown will have longer-term costs, as we will argue below, which may exceed those of a strict but limited lockdown. What increases the uncertainty of the “value” of altogether ending the lockdown is that the experience worldwide had shown that the strictness of lockdowns does not correlate well with their degree of economic hardship. Many countries with lighter lockdown measures than South Africa have been forecasted to end up with much sharper declines in GDP growth in 2020, such as Greece (−9.0%), Spain (−10.9%), Portugal (−9.8%) and Slovakia (−9.0%).

In this respect, it can be mentioned that a study comparing Sweden and Denmark found that, whereas Sweden had a light lockdown, and Denmark a very stringent lockdown, aggregate consumption declined by about the same amount (25–27%) in both countries (Andersen et al., 2020). Another study found that people will tend to voluntarily self-isolate before governments institute mandatory lockdown measures (Chen et al., 2020). Chen et al. (2020, p. 7), studying data from the USA and Europe, concludes that avoiding or ending a lockdown:

[…] may not fully shield an economy from the COVID-19 shock and that the depression of economic activity may persist even after mandatory lockdown measures are lifted if people continue to voluntarily limit their mobility – as they indeed found was the case in the USA and EU.

Similarly, in the case of South Korea, it was found that “COVID-19 doesn’t need lockdowns to destroy jobs” (Aum et al., 2020, p. 1). The implication is that even if lockdown measures are lifted, people will avoid risk if they know the virus is out there, and they will reduce consumption to raise precautionary savings. Knowing that this is how their consumers think and behave, businesses would freeze their investment plans, new business creation would stagnate and the economy would fall into a low-growth trap. This was what, in fact, prolonged the Great Depression in the 1930s (Shiller, 2020). In South Africa’s case, further consideration is that a smart lockdown, supported by a fiscal safety net, offers protection in particular to low-income households, who are more exposed in their jobs to being infected, and who have less possibility than high-income households to work from home or work in conditions that observe social distancing rules.

Thus, the claims made by the big business sector that South Africans have burdened under the longest and hardest lockdown in the world, and that it is the lockdown that was the main destroyer of the economy, did not rest on solid foundations. In fact, for a campaign instigated and led by the business sector, it showed remarkably little business foresight [9]. It should have realized that unless South Africa could show that it can manage the COVID-19 pandemic well, it would exacerbate long-term structural economic circumstances that would depress growth and delay economic recovery. This is because COVID-19 is a highly contagious, global pandemic. The world is hardly likely to stand by silently and allow South Africa to be a hot-spot for uncontrolled incubation and spread of the virus.

In contrast to facing a global pandemic under conditions of great uncertainty with no NPI’s (lockdown measures), a well-managed lockdown can bring the pandemic under control, save lives, signal government competence, build trust and allow the country to resume its international business sooner rather than later. The net benefits of altogether ending a lockdown are subject to great uncertainty, something the business sector in South Africa did not seem to grasp.

4. Goldilocks lockdown?

The South African Government has a moral responsibility to its citizens, and those of the world, to protect life against the pandemic. The pandemic is more rapidly spreading and more complex than was thought, and more virulent than the common flu. Data from China indicated that at the outbreak of the disease, the reproduction ratio (R0) was around 2.5 (Anderson et al., 2020). More recent calculations from China estimate R0 to have been 5.7 (Sanche et al., 2020). For South Africa, R0 has been estimated at 2.95 (Mukandavire et al., 2020). It was thus, on all accounts available during the beginning of 2020 highly contagious – the common flu has a reproduction ratio of between 1.1 and 1.5.

COVID-19 also appeared in 2020 to be more deadly than the common flu: a Columbia University study found the infection fatality risk (IFR) during the New York outbreak in March to be 1.45% for all people but 6.1% for 65–74-year-olds and as high as 17.0% for people older than 75 years (Yang et al., 2020). A study using seroprevalence data from Switzerland found an IFR of 0.6% for the total population, and an IFR of 5.6% for people older than 65 years (Perez-Saez et al., 2020). According to the estimates, the IFR in South Africa had been put at either 0.4% (Walker et al., 2020) or 0.70% (Ghisolfi et al., 2020). The common flu has an IFR of between 0.1 and 0.2%. COVID-19 was furthermore found to cause 1/16,000 infected persons to require intensive care – in contrast to only 1/154,000 who require intensive care in the case of influenza (Petersen et al., 2020).

Unless a virus with this virulence and fatality is contained, it can impose a high health cost while the world waits for a vaccine to be developed (Amanat and Krammer, 2020), and to be made available in developing economies (Callaway, 2020). A smart lockdown, while coming with a price, can still over time also be the best economic response – but for this, a number of conditions need to be met. Not all lockdowns are equal. South Africa’s lockdown has certainly been sub-optimal. It is not, however, a reason to end the lockdown but to make it smarter. The South African Government (like many other governments around the world) imposed its lockdown without having an exit strategy in place. A smart lockdown is a lockdown that is oriented toward an exit at the right time. What would such a smart lockdown for South Africa look like?

First, it needs to be realized that, as Ornelas (2020, p. 1) in a survey of lockdowns across the world concludes that:

[…] there is no “health vs economics” dichotomy. Rather, some degree of lockdown is typically optimal in a crisis like this, balancing its economic costs against its health benefits. Moreover, the optimal lockdown is dynamic, changes over time.

The aim is to save as many lives as possible and to shield the health-care system from collapsing under the strain of large numbers of infected patients, and then to make an exit possible as soon as possible. The World Health Organization (WHO) has identified six categories of measures that a government needs to have in place before it can start to ease on lockdown measures [10]. In terms of these, South Africa was by September 2020 facing some real scope for a flexible lockdown, in particular regionally, it could be made more or less stringent at different locations as the situation indicates. Since August 2020, the transmission of the virus in South Africa started slowing down, as measured by new infections (see Figure 3) but this was not yet such that complacency can be afforded, never mind justifying a complete ending of all lockdown measures, as the B4EL demanded.

Second, decentralization of decision-making over lockdowns to lower levels of government is superior to a centralized response (Aubrecht et al., 2020), but under the condition that sub-national governments collaborate effectively – see the discussion of the Italian experience in Carinci (2020). A decentralized approach can better take into account the typical spatial heterogeneity of the virus’ impacts, allows better coordination and social support where it is most needed and facilitates learning and experimentation – important given the uncertainty that still surrounded many aspects of the disease by mid-2020 (Collier, 2020). More pertinently, decentralization would be better than the current top-down approach dictated by the NCC. Bhorat et al. (2020) compiled a Physical Interaction Index for South Africa. It showed that the: “degree of physical interaction,” which reflects the possibility of transmission, differed significantly across South Africa’s regions, which made the case for a decentralized, spatially focused lockdown almost obvious.

Third, given its demographic profile, it is not advisable for a country such as South Africa to follow a blanket Western-style lockdown. The mortality risk of COVID-19 has been established to be much higher for those older than 80 years (Dowd et al., 2020). In South Africa, the population is overwhelmingly young – the median age of the population is only 27.3 years. The proportion of the population that are thus at the highest risk – those older than 70 years is only 3%. For South Africa, an “age-specific lockdown policy” (Alon et al., 2020) should be de riguer.

Fourth, special support needs to be tailored to get young people into jobs or entrepreneurship. Young people who are affected by an epidemic have been found to have subsequently much less trust in governments, political leaders and in elections (Aksoy et al., 2020). Because trust is an important requirement for government policies to be effective to curb the spread of the virus (Fukuyama, 2020) and the fact the lockdown in its current form is strongly re-distributive from the young to the old (Glover et al., 2020), suggest that the fuse on the political time-bomb of millions of disgruntled, unemployed and unemployable youth has just been shortened significantly. The youth needs to be the major beneficiary of the emergency financial support package.

Fifth, smart lockdowns are based on data-driven decision-making. Accurate real-time data can help pinpoint who and how many are infected, and support identification, isolation and contact-tracing [11]. A review of the issues involved, and lessons learned from using data in the fight against COVID-19 is contained in Naudé and Vinuesa (2020). Visvizi and Lytras (2020b) furthermore contains a discussion of the ways in which governments can more optimally use their capacity to manage new risks. In the case of COVID-19, two key aspects are testing and the use of contact-tracing apps. Regarding the latter, South Africa has a mobile phone penetration rate of more than 80%, which could make the use of a contact-tracing app a valuable new tool. One prerequisite, however, is that a significant percentage of the population need to download and use the app, and this will be unlikely as long as people have low levels of trust in government or face the threat that their data privacy will be endangered. For a deeper discussion on the trade-offs and challenges in this regard, see Naudé and Vinuesa (2020).

As far as testing is concerned, this gathers key data which may be needed for relaxing and eventually exiting from a lockdown (Dewatripont et al., 2020). Testing will allow identifying who is infected and who is immune, allowing people who are not a risk to resume their normal economic activities (Eichenbaum et al., 2020). It does not have to be universal random testing, which may not be feasible, but rather the more affordable approach of stratified periodic testing (Cleevely et al., 2020). With more than 3.5 million tests already carried out, the country has proven that it does have some capacity in this regard. It needs to ensure that it keeps having access to test kits, and if necessary, lobby internationally, e.g. through the Africa Centre for Disease Control and Prevention or WHO to ensure supplies (Akinwotu, 2020). Given also that testing in the country currently costs around an estimated ZAR1,200 (US$60) per test, it would be helpful to encourage innovations to bring down this cost. In Senegal for instance, a US$1 test has been reported to be in development (Yeung, 2020).

Finally, the smart lockdown needs to be underpinned by an appropriate economic recovery plan. Over the shorter term, recovery will depend on what happens to aggregate demand. For the foreseeable future, neither the government nor South African households should be counted on as sources of demand growth. The government’s debt levels and hence lack of fiscal space (Bhorat et al., 2020) and rising unemployment and uncertainty (Spaull et al., 2020) precludes this. Getting aggregate demand going is one of the most significant challenges for post-COVID-19 recovery. The COVID-19 shock, which started as a supply shock, rapidly evolved into a demand-side shock (also referred to as a Keynesian supply side shock). With government and households being fiscally constrained, this leaves export growth as one of the few potential channels to stimulate recovery.

But how realistic is it, given what has been said about the shrinking of the world economy, for South Africa to export its way out of the recession? A definite answer falls outside the scope of this paper and is left for a future study to provide. For present purposes though, it could be argued that there may perhaps be more scope for an export-led recovery than may be commonly imagined. To motivate this claim, first note that after the 2009/2010 global financial crisis, export support was one of the most widely used measures to spur on recovery, particularly in emerging economies (Evenett, 2020). Second, while the COVID-19 pandemic has played havoc on international transport logistics, especially associated with international air cargo and passenger travel, globally, the trade of goods has continued to flow, albeit with interruptions, delays and in some cases, no access. Not surprisingly, this had a noticeable impact on South Africa’s reported exports for April 2020. However, by May 2020, export values were back to 2019 value levels and even up compared to the preceding four years for the month of June. In conclusion, an export-led recovery strategy would benefit from a smart lockdown strategy, as it would reassure the country’s global partners that the country is safe to trade with and eventually visit.

5. Concluding remarks

Perhaps the key to promote more solidarity in South Africa in the fight against COVID-19 is for the realization to sink in that there is no health vs economy (or life vs livelihoods) dichotomy. A lockdown, if well-managed, can save lives, reduce pressure on health-care facilities, and moreover, limit economic damages and position the economy on a path of a more certain long-term recovery. A well-managed lockdown could restore trust in the government. Without such, the economy will not rebound by as much as it potentially can, because the threat of a second or third wave with its potential associated health costs is possible. The global community will not look kindly on South Africa as a potential reservoir for the incubation and spread of COVID-19 to the rest of the world. Not getting the disease under control risk making South Africa globally isolated – which will entail a substantial price. The global nature of the pandemic, which by September 2020 had taken almost a million lives, was underscored in a joint statement [12] signed in April by 18 African and European Union leaders, which recognized that “No region can win the battle against Covid-19 alone. If it is not beaten in Africa, it will return to haunt us all.”

Abandoning the lockdown prematurely is risky not only from a health perspective but from an economic perspective. There is no certainty that lifting the lockdown will come with substantial net benefits over the foreseeable horizon. Quite the opposite could be the case. Breaking with government and creating the impression, wrongly or not, to want to abolish any form of lockdown and thus potentially put millions of poor workers in the front-line of a global pandemic for the sake of uncertain economic benefits may perhaps be the wrong response at the wrong time by the big organized business sector.

While it cannot be business as usual, it also cannot be lockdown as usual. The government has mismanaged the lockdown as reflected in its failure to prevent the looting of emergency funding, in the discriminatory allocation of such funding, in the draconian and brutal actions of the police and in the many illogical, irrational and inconsistent measures that characterized the lockdown. The failure of the government’s centralized, top-down approach through its “National Command Council” should be taken as a general lesson also for its “National Democratic Revolution” approach toward economic development, which like its lockdown, needs a less brutal, less corrupt and less bizarre approach.

The fact that the government mismanaged the lockdown is, however, not a reason to scrap it. Lockdown measures are necessary in case of a virulent pandemic for which there is, at the time of writing, still no vaccine and have helped curb the spread of the disease in South Africa and elsewhere. South Africa instead needs a smart lockdown, which is a “Goldilocks” lockdown with an exit strategy not too soon, but not too late either. This paper highlighted six elements of such a Goldilocks lockdown: it should be flexible, based on massive testing, decentralized, age-specific, youth-supporting and promote a demand (export)-led economic recovery.

With its high levels of inequality, with growth having stagnated for a decade, with the economic pie shrinking, with trust in government gone and with the business sector in defensive mode, the dominant game in South Africa has become a zero-sum game. In a zero-sum game society, polarization and conflict over the existing economic pie tilt the incentives against investment, innovation and entrepreneurship, and in favor of non-productive, destructive and rent-seeking behavior (Baumol, 1990; Davidai and Ongis, 2020). Manifesting after the loss of up to ZAR1.5tn (US$70bn) (three times as much as the COVID-19 relief funding) embezzled during the State Capture Scandal (Merten, 2019; Myburgh, 2017), the pandemic threatens to consign the country to failed state status. The fact that both the government and business sector have responded poorly and at loggerheads could hasten this outcome. It is therefore important that both parties drastically change direction and pull together on a smart lockdown if the war on the pandemic, and ultimately on poverty and stagnation, is to be won.

Figures

Growth in confirmed COVID-19 cases and deaths (logarithmic scale) in South Africa, March 6, 2020–August 23, 2020

Figure 1.

Growth in confirmed COVID-19 cases and deaths (logarithmic scale) in South Africa, March 6, 2020–August 23, 2020

Terminal decline? Annual GDP growth (%) in South Africa, 2000–2020

Figure 2.

Terminal decline? Annual GDP growth (%) in South Africa, 2000–2020

Flattening or postponing the curve? Number of new daily COVID-19 cases in South Africa, March 6, 2020–August 23, 2020

Figure 3.

Flattening or postponing the curve? Number of new daily COVID-19 cases in South Africa, March 6, 2020–August 23, 2020

Stringency Index and % change in workplace mobility, March 23, 2020–July 31, 2020, ten most affected countries

Figure A1.

Stringency Index and % change in workplace mobility, March 23, 2020–July 31, 2020, ten most affected countries

South Africa: excess deaths (%) and lockdown stringency per week, January 7, 2020–August 18, 2020

Figure A2.

South Africa: excess deaths (%) and lockdown stringency per week, January 7, 2020–August 18, 2020

Notes

2.

This is likely an under-count. The South African Medical Research Council indicated that excess deaths in the country reached 59% in the second week of July, see https://tinyurl.com/y32mmxuy. According to The Economist Excess Deaths Tracker, excess deaths in South Africa were 65% by the third week of July 2020. See Appendix 2 for more detail.

3.

For a discussion of the budgetary response package and its coverage, see Bhorat et al. (2020).

9.

It may plausibly be expected that the “infodemic” that has accompanied the COVID-19 outbreak is muddling the waters somewhat in South Africa through contributing to the spreading misinformation and disinformation, including by so-called lockdown skeptics. Brennen (2020, p. 1) described the extent of this infodemic, highlighting the spread of misinformation about COVID-19 through practices where “true information is spun, twisted, recontextualised, or reworked.”

11.

Data analytics can also help gauge the extent to which various sectors and businesses can institute remote working or can continue activities without workers coming in close physical proximity. See, for instance, the Physical Proximity Index for South Africa estimated by Bhorat et al. (2020).

Appendix 1

Figure A1 contains a scatterplot of the Stringency Index and the decline in workplace mobility (from Google’s Mobility Trends, see www.google.com/covid19/mobility/) as compiled by Our World in Data (see https://ourworldindata.org/covid-mobility-trends). The figure suggest, as could be expected, a negative relationship between the stringency of a lockdown and the disruptions to travel to work. The figure furthermore indicates that South Africa, although having a rather stringent lockdown, did not have the severest lockdown in the world, neither in terms of the Stringency Index nor Google’s Mobility Trends Data.

Appendix 2

Figure A2 plots the level of stringency of South Africa’s lockdown together with the percentage of excess deaths over the period from January 7, 2020 to August 18, 2020. It shows that by the week ending on 23 June, excess deaths were positive and were starting to rise. It continued to rise steeply so that by the end of the week of July 21, 2020, excess deaths in South Africa stood at 65%. This rise in June and July begs the question whether the lockdown was not perhaps prematurely relaxed in June.

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Acknowledgements

Authors are grateful to Anna Visvizi and two anonymous referees for helpful comments on an earlier version of this paper. The usual disclaimer applies.

Corresponding author

Wim Naudé can be contacted at: naude@time.rwth-aachen.de

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