- Lockdown restrictions will be eased further, but the date is yet to be announced.
- Cinemas, hairdressers, casinos and restaurants will be allowed, as well as some sports.
- Economists welcomed the move, but noted that consumers may be wary of embracing the change – meaning demand may be muted.
Lockdown restrictions are to be further eased, allowing some half-a-million people in the affected industries to return to work, President Cyril Ramaphosa said on Wednesday evening.
However, he did not announce a date, saying the details were yet to be confirmed.
Ramaphosa’s address to the nation followed earlier assertions by small business development minister Khumbudzo Ntshavheni, who told various media earlier in the week that government was considering a move to “advanced” Level 3 of lockdown.
Here’s what will change under the eased regulations.
Restaurants will be able to open for sit-down meals. To date, restaurants have only been allowed to open for takeaways, which has raised concerns among both analysts and lobby groups, who have argued that restaurants typically cover costs with initial seat bookings. Reopening restaurants will likely impact a large number of workers – in 2018, 268 299 people were working in the hotels and restaurants industry in South Africa, up from 189 925 nine years earlier.
Personal care and beauty, including hair salons, are reopening. Hair salons and beauty parlours have been a hot topic since the start of the lockdown, with some hairdressers arguing that salons are among the more hygienic businesses. Ramaphosa argued that salons were particularly important as many of them were small businesses owned or run by women. “This will give them the support to become financially independent and this is an important priority,” he said.
(Some) sport is on the cards. Non-contact including tennis, golf and cricket will be allowed, while training and modified activities, with restricted use of facilities, will be allowed for contact sports. Though local data is not yet quantifiable, globally, the sports industry has been dealt a particularly heavy blow by the coronavirus. According to the World Economic Forum, the industry – estimated to be worth $471 billion in 2018, nearly double what it was worth in 2011 – has been left largely unable to meet its commitments to broadcasters, leading to a crippling loss of income the biggest money-spinners globally.
Accredited and licenced accommodation will be open. The exception will be home sharing services such as AirBnB. This will bring some relief to businesses the tourism industry, which have to date been among the hardest hit by the coronavirus pandemic, despite some relief in the form of a R200-billion relief fund.
The Tourism Business Council of SA previously predicted about 600 000 direct tourism jobs could be lost in 2020 alone. The tourism sector has to date been a significant economic contributor, with the World Travel and Tourism Council estimating that before the pandemic, it directly contributed between R139 billion and R145.3 billion annually to SA’s GDP.
Conferences and meetings for business will be permitted. This will be in line with restrictions on public gatherings, Ramaphosa said. It follows on an earlier easing of restrictions for air travel, where some domestic travel for business purposes has been allowed, providing limited relief for airlines.
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Cinemas will be allowed to open. Similarly, the president said, this will be in line with regulations on public gatherings. The film industry worldwide has suffered under the coronavirus pandemic, with cinemas in other countries coming up with creative solutions to keep screenings open. These have included postponements, digital rental platforms and staggered entrances to allow for social distancing.
Long-term, it’s unclear what a reopening will mean for SA or what the uptake will be. However, according to the Gauteng Film Commission, the South African content production industry is valued at around R5.5 billion a year, while the film industry contributes R2.5 billion a year to that province’s economy alone.
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Casinos will be permitted. Ramaphosa did not give details on other businesses in the leisure and gaming industry. The reopening of casinos follows on the heels of horseracing being given the green light as the country moved to Level 3.
The easing of restrictions would depend on “specific and stringent safety requirements” which have been agreed upon with industry representatives as well as the National Coronavirus Command Council, Ramaphosa said. “Those will need to be put in place before business or an activity can reopen and protocols will need to be strictly adhered to for those entities or businesses to remain open.”
But will consumers bite?
Chief economist of the Bureau for Economic Research Hugo Pienaar said that while it is “good news” that there is a further opening up of the economy with more industries being allowed to operate, it is yet to be determined if consumers would be willing to flock to restaurants and cinemas at a time while infection rates are picking up.
“This is now becoming tricky [for businesses]. These are now services or industries where social distancing is quite difficult … It is in the business’ interest to put in place necessary protocols,” he said.
Chief economist for IQ Business Sifiso Skenjana said there would certainly be “depressed demand” from consumers, off the back of the “cultural shock” of social distancing. But this does not mean there will be no activity.
“Any economic activity would make a meaningful difference, especially with these sectors employing more than a half a million people,” Skenjana said.
He explained that the resumption of activity in these areas would help address the impact on the “middle” – these are black women predominantly employed by these businesses as well as informal sector businesses which were unable to access “buffers” or Covid-19 support.
“Unemployment is a particularly pervasive for black women in South Africa, and so the challenge is that sectors which were excluded from the economy lend themselves to a large, broad-based particpation of black women,” he said.
In a statement, Business for South Africa’s Martin Kingston noted that lockdown restrictions had a negative impact on people’s lives and their livelihoods. “The move to these enhanced level 3 regulations will allow more businesses to open, more people to work, and more services to be delivered to the public,” he said.
Kingston added that increased economic activity heightened the risk of transmission. “We must all change our behaviour to protect not only ourselves, but our families, colleagues, friends, and communities. We are responsible for protecting them,” he said.
