South Africa Partially Eases Lockdown Measures

South Africa on Monday, June 1 started easing lockdown measures. The nation hopes to resuscitate its economy by gradually opening up businesses. President Ramaphosa on Sunday announced level 3 measures that will see public transport, sale of alcohol, factories, mines, and schools reopened, ending 9 weeks of total lockdown. Factories and mines will operate at full capacity.

South Africa has tested at least 725,125 people recording a total of 32,683 COVID19 cases and 683 deaths as of Sunday. Level 3 lockdown will see 8 million people get back to their work stations.

We are re-opening most areas of the economy so that people can earn a living, and so that this immediate health crisis does not result in a permanent economic crisis

President Ramaphosa

Lockdown measures threatened to bring the economy to a halt as firms reported falling cashflows as regulations shuttered all activities save for essential services.

APRIL TRADE DEFICIT

The South African Revenue Service (SARS) announced a budget deficit of R52.1 billion in April due to business closure and tax holidays giving more time to make tax payments. In addition, SARS released trade statistics for April 2020 recording a trade deficit of R35.02 billion.

The year-to-date (01 January to 30 April 2020) trade deficit of R0.33 billion is an improvement from the R8.87 billion deficit for the comparable period in 2019. Exports decreased by 3.5% year-on-year whilst imports deteriorated by 5.5% over the same period.

The R35.02 billion trade deficit for April 2020 is attributable to exports of R53.01 billion and imports of R88.03 billion. Exports decreased from March 2020 to April 2020 by R65.06 billion (55.1%). The Minerals Council of South Africa attributed the decline in mineral exports to disruptions at the port affecting manganese, iron ore, coal, and most bulk shipments.

Imports decreased from March 2020 to April 2020 by R6.11 billion (6.5%).

Data from Statistics South Africa shows that in April, almost half of all businesses surveyed did not have enough money to continue with their operations beyond the five-week lockdown. Moodys in April blamed the nationwide lockdown for economic stagnation saying that the South African economy will contract by 2.5% in 2020.

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