Activator Tshego Ramatlo shares her opinion on the effects of the pandemic on the economy

By Lwazi Nongauza

 

South Africans are aware of Coronavirus infections and escalating death figures, thanks to daily updates.

But how many of us (whether infected or affected by the virus) know what will happen to our lives after we have defeated Coronavirus?

Will our lives go back to normal? Will those who had jobs before the lockdown still be employed? Will entrepreneurs’ businesses still be operational?

Will the South African junk status economy still be able to thrive or will it shrink further or just struggle to recover until it dies a silent death?

In an exclusive interview with Activate Leadership, Investec economist Tshego Ramatlo answers these questions.

According to this young economist, life is likely going to be hard for everyone after the lockdown. In fact, she believes that lockdown could lead to a sharp 41% q/q (saar) contraction in 2010 and full-year GDP growth of around – 7% y/y.

”Pharmacies, fuel stations and selected stores will continue to operate throughout the lockdown, but the big questions is how many people will still have jobs, businesses or any form of income after the lockdown? Edcon Group’s sudden mass job losses is concerning, ” said Ramatlo.

On a positive note, Ramantlo said there are businesses that will definitely be able to weather the storm.

“Delivery businesses are one of those. I strongly believe that if delivery businesses are allowed to operate, it will definitely make money because the client’s purchasing behavior will drastically change. Thus, I foresee an upward trend in online businesses,” said Ramatlo.

But on the future of labour intensive businesses where there will be a huge challenge of trying to curb the spread of Covid-19 among employees Ramatlo said: “Labour intensive businesses like food producers who will go back to a new normal will depend on whether they have cash or not.”

Although the government has been in the forefront in communicating the impact of the pandemic in human life, information about the economic outlook post pandemic has not been forthcoming.

Economic contractions are expected to be deepest in the second quarter of 2020, with gradual recoveries expected in the third and fourth quarters of the year.

During the recent Monetary Committee Meeting, Reserve Bank governor Lesetja Kganyago said the strength of the global economic recovery will depend in part on how quickly countries are able to open up for economic activity safely, and in particular how societies comply with social distancing rules.

There is rising uncertainty about future global economic prospects, trade relationships and supply chains.

South Africa has been presented with challenges in forecasting domestic activities since the outbreak of Covid-19 and its major impact on society.

“The government will (rightfully so) continue to update all of us about the numbers of coronavirus related infections or deaths but it is unlikely that anyone in a position of power is willing to tell the nation about the possible disaster that will come when or if Coronavirus subsides. Now that you know, being forewarned is being forearmed,” she said.

Tshegofatso Ramotlo is a University of Cape Town Economics graduate and currently an Investment Manager at Investec Wealth and Investment. Her views are her own

This is a story from the ACTIVATE! Change Drivers Network. A network of over 4200 diverse young people driving change for the public good across South Africa. Members of this network, Activators, are connected by their passion, skills, sense of self and spark to address tough challenges.

 

 

 

 

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