Coronavirus and Africa - in South Africa, a Fast and Decisive Response

Is the health system resilient enough to cope with the epidemic?

By developed world standards, we have relatively low numbers of health workers, ventilators and hospital beds, particularly intensive care unit (ICU) beds per 1.000 people (2.2 beds per 1 000, 0.09 ICU beds per 1 000). Our private health system is better resourced than the public system, hence an obvious strategy is to temporarily pool resources to maximise capacity for the population as a whole. We have been able to roll out testing across both the public and private sectors, with drive-through facilities being launched last week, an increased number of public labs and a move to more rapid testing results. This will allow for a deepening of testing and an improved response. There has also been some loosening of tele-health regulations in the past week which will help to ease constraints on the system.

Flattening the curve is the only option to prevent the South African health system from being overwhelmed.

What will be the economic impact of the coronavirus in South Africa?

The implementation of the lockdown has had the effect of crystallising the economic implications of the pandemic. The economic consequences are dire given that South Africa has limited fiscal space and the economy is already in recession (a 1.4% contraction in the 4th quarter of 2019).

State assistance for small and medium businesses pales in comparison to the potential scale of economic fallout. Related to business strain, we expect to see a dramatic increase in unemployment (off an already high base of unemployment – 38.7% using the expanded definition). The Unemployment Insurance Fund will pay out a benefit to those unemployed due to the lockdown at the level of minimum wage. This caters for 18% of those employed to become unemployed. It is unclear whether this will be sufficient (based on emerging unemployment numbers out of the US). There is also a concern about the operational capacity to enable large-scale processing of benefits as well as the longer-term implications for the sustainability of the Fund. Whilst the Fund does have a surplus, falling investment values, reductions in the number of contributors and a sharp rise in claims will rapidly erode it.

The Fund only reaches those in formal employment. Fortunately, the existing social grant system will go some distance to maintaining a flow of funds to households. Structured support for undocumented workers and the large informal sector are far trickier problems to solve. Those who fall outside of any of the existing social security systems will be hardest to reach.

What are your recommendations to the decision-making bodies and the South African population?

Regarding the virus, South Africa has acted both early and decisively. We need to move quickly to negotiate with private providers to increase access to care. We also need stronger action on permitting tele-health, both to improve access and to protect our health workers.

Our rapid action has shocked our economy with far-reaching social consequences. The focus of the government in the coming weeks has to be on extending the social security net and alleviating poverty, including for the large number of undocumented workers in the country. Poverty has a mortality rate too.

Copyright: Phill Magakoe / AFP