Category: dearSA

Under lockdown, South Africa has had to come to terms with a new concept – the idea of an ‘essential business’. These are the companies that the government has allowed to keep operating during this period.

In a broad sense, the way that essential businesses have been defined seems reasonable. The government has clearly applied its mind to what is required to keep a country going.

Healthcare services are obviously necessary. Grocery stores need to stay open so that people can get food. The media must be able to keep the country informed. Financial services need to facilitate payments and keep capital markets functioning.

In order to slow the spread of Covid-19, it makes sense to limit activity to companies in these sectors. However, does that really mean that all other businesses aren’t ‘essential’?

Recognising reality

In a recent webcast, Jerry Gundlach, founder and chair of US investment firm DoubleLine Capital, posed exactly this question.

“There is no such thing as a non-essential business,” Gundlach argued. “They are all essential to their owners, and those businesses are interconnected to one another.”

This is something South Africa is going to have to grapple with in a very real sense when the lockdown is over. It is a reality that will be recognised in two ways.

The first is that every business exists because it is supplying something to somebody. Your local hairdresser might seem the furthest thing from ‘essential’, but it wouldn’t exist if customers didn’t feel they needed it.

In fact, after weeks of South Africans having to go without a visit to the hairdresser, any salon that is able to open its doors again is likely to be inundated with clientele. It will quite possibly be a boom time not only for them, but also for beauty parlours, spas and wellness centres.

This will be a demonstration of just how ‘essential’ these businesses are.

Links in the chain

Examples like this, where companies and individuals are able to respond to a pent-up demand, could well be a good news story post-lockdown. However, there will be others that are far less positive.

Many businesses that are supplying parts or services within larger supply chains are going to struggle to survive. Even if they do, they may start operating at reduced capacity after the lockdown.

This will have knock-on effects. Any supply chain only runs as well as its least efficient component, and this could mean major disruptions to many parts of the economy as capacity is re-established. This could take years.

Read: Banks are taking applications for Oppenheimer donation

Put another way, every business in a supply chain is ‘essential’ to keeping it functioning in a productive manner. Unfortunately, the lockdown is going to prove how true this is.

Bread and butter

The second reality, which the country is already having to face up to, is that every business is ‘essential’ to its owners and the people who work there. Companies provide jobs and livelihoods to millions of South Africans.

Some businesses are already accepting that they cannot survive for 21 days without any cash flow. People are already being retrenched. This is going to make life extremely hard for many South Africans, some of whom would have felt they were in secure jobs just a few weeks ago.

What can’t be ignored is that companies that create jobs and pay wages are an ‘essential’ part of any social system. By generating profits and paying taxes, they are also an ‘essential’ contributor to the country’s greater wellbeing.

If South Africa loses large numbers of businesses due to the need to respond to the threat of Covid-19, the country will be significantly worse off.

This is an unpleasant reality, but perhaps it will also be a necessary shock. It will be very obvious when South Africa emerges from lockdown just how ‘essential’ business is. In a country where attitudes towards business are often antagonistic, this will hopefully be eye-opening.

The country will not recover and will certainly not prosper unless we recognise just how ‘essential’ every business is.

Encouragingly, a lot of money and effort has been pledged to supporting as many businesses as possible through this period. Hopefully the same focus can be brought to creating a more enabling environment for them once it is over.

Article by Moneyweb

Justice Project South Africa founder Howard Dembovsky talks to Clement Manyathela about the estimated tax and other revenue losses during the 21-day lockdown ban on cigarette and alcohol sales.

When it comes to the sale of cigarettes we are losing approximately R35 million per day in levies and excises that are imposed on cigarettes, but it also encourages the illicit trade in cigarettes which has been an ongoing problem in South Africa for a long time and it is encouraging organised crime.

Howard Dembovsky, Founder – Justice Project South Africa

When it comes to alcohol the losses are about R100 million a day in alcohol levies and revenues.

Howard Dembovsky, Founder – Justice Project South Africa

Dembovsky says these bans are short-sighted and unnecessary.

Cape Town – Calls are mounting for the City to offer some relief to taxpayers and residents struggling because of Covid-19 and the resultant lockdown.

Sandra Dickson of Stop COCT / DearCapeTown said this relief should include four months’ relief for all ratepayers – from paying rates, refuse removal and water sanitation – permanent scrapping of water and electricity levies, and zero increase for any services tariff for 2020/21.

With the current draft 2020/21 budget still on the table, Dickson said this can be adjusted to deal with the Covid-19 aftermath.

“Many businesses are expected to close and even more people are going to lose their jobs. We urge the City to take early measures to avoid the mayhem, which will impact the City’s accounting system when hundreds of thousands of municipal accounts go into arrears as a result of the inability of residents to pay their utility bills,” she said.

The City of Cape Town has around 600000 ratepayers, and if a large portion of them fail to pay their bills in the next few months, the City will find its accounting system in a mess, Dickson said.

“Banks and other financial institutions are giving their clients relief by deferring payments or spreading payments over future months. The City is not a profit-making organisation. It has immediate cash reserves of more than R10 billion. In the long term the City has more than R18bn in cash reserves,” Dickson pointed out.

She said this was ratepayers’ money, accumulated over years, which should have been used for service delivery in the first place, adding that it was therefore reasonable for ratepayers to expect relief to be given by using the City’s vast cash reserves.

Dickson urged the City to “serve its constituents and return some of the money and surpluses that have accumulated via service tariffs and levies over many years”.

Delft Ratepayers Association chairperson Mogamat Titus said a “breather” from the bills will ensure that poor families who have found themselves out of jobs spend the little cash they have on basic needs.

“Lockdown is now about survival, and most families are worried whether they will have enough food.

“Unemployment is at its highest and with the little that they get most of their earnings are spent on food, which is an essential during this lockdown,” Titus said.

Mayco member for finance Ian Neilson said the City was considering such proposals together with a large number of other suggestions.

He said the City will first ensure that it secures the delivery of basic services and crucial deliverables to ensure people’s health and safety.

“The City’s programme will be in the best interests of all Capetonians, and it will be funded by implementing some of the strategies listed by Stop COCT, among others. This will include cutting the salary budget of the City, drawing from budgets no longer needed due to the lockdown (travel/events etc),” he said.

Neilson said it was a myth that the City had funds sitting in bank accounts which do not have a specific purpose. “We ensure that we have enough cash to cover working capital needs, and the rest is used to fund budget needs, including current programmes.”

@Mtuzeli

mthuthuzeli.ntseku@inl.co.za

As speculation mounts in political and business circles about whether Finance Minister Tito Mboweni will revise the 2020/21 budget in light of South Africa’s dramatically altered economic conditions, it has emerged that government has initiated talks to launch a massive infrastructure project to kick-start and boost the economy once the Covid-19 coronavirus pandemic has run its course.

Economists predict that the economy may shrink by between 2% and 7% due to the 21-day lockdown announced by President Cyril Ramaphosa almost two weeks ago, as well as the country’s sovereign credit rating downgrade by ratings agencies Moody’s Investors Service and Fitch Ratings.

Speculation in government circles is that the shrinking economy could increase the official unemployment rate to 50%.

A senior government official with knowledge of the talks said that, although officials at Treasury were preoccupied with dealing with Covid-19, they were already thinking about how to resuscitate the economy once the deadly virus was gone.

The official said Treasury would also be forced to review the budget presented by Mboweni in February.

“We are in a different world now. All the budgetary assumptions we had made are out of the window. All the figures, projections and scenarios we had referred to are irrelevant. The question is how soon we can present a new budget to the nation.

Maybe not necessarily an entirely new budget, but a significant review of the initial budget is inevitable. We have no choice; the world has changed dramatically. We may have to cut the budget by more than R260 billion. We may be forced to not increase wages above inflation. What I am saying is that we have to go back to the drawing board.”

It was a “great opportunity for us to reboot our economy”, he said, adding that Ramaphosa had gained political capital and had been emboldened by his handling of the coronavirus outbreak.

A former Treasury bureaucrat said government “will definitely have to look at the budget again, as well as all the numbers they have tabled. There will be no economic activity in the first quarter of this year.

As such, there will be massive under-collection by the SA Revenue Service [Sars]. There is a correlation between economic activity and revenue collection. There will be subdued economic activity in the next three months and we will have a deep recession.”

The official said: “Government is looking into a massive infrastructure spend programme … to get us out of the current situation. The only way to kick-start the economy is through an infrastructure programme [of] not less than R2 trillion. There is really no way we will be able to get out of this fallout without [this].

With unemployment set to rise to about 50%, [such an] infrastructure programme will draw a lot of people into employment. Granted, some of the jobs will be temporary, but it they will be jobs nevertheless.”

While details about the infrastructure programme are sketchy at the moment, the official said the multitrillion-rand scheme, which could last for between three and five years, would incorporate projects on energy, transport and logistics, rail, education, housing, health, dams, and roads.

Government, the official said, would consider various funding models, including borrowing money from the Public Invest Corporation, the International Monetary Fund, the Development Bank of Southern Africa and the New Development Bank.

Funding from asset managers and other private lenders would also be considered, he said, adding that, while the economy would be battered in the short term, the reconstruction afterwards would offer Treasury an opportunity to implement drastic reforms in the economy.

As the economy declined, unemployment levels would increase dramatically and, as companies retrenched, the country’s tax base would shrink and the deficit on the budget would rise, he said, adding that the implications for government were big.

“The question is, what are we doing? We are introducing the structural reforms we spoke about. We are reorganising ourselves as a government. We are talking about actions that must be taken immediately after Covid-19.”

Early this week, Sars commissioner Edward Kieswetter reported that the agency had collected R1.356 trillion in taxes last year. This was R66.2 billion short of the projected R1.42 trillion.

The official said he had also heard that Treasury and Ramaphosa’s infrastructure investment office, headed by former Tshwane mayor Kgosientso Ramokgopa, were working on an infrastructure plan that would be announced in due course.

Article by News 24

JOHANNESBURG – Ratings agency Fitch has downgraded South Africa’s credit rating to BB from BB+, sending it further into “junk” territory while also assigning a negative outlook.

Fitch has on Friday cited “the lack of a clear path towards government debt stabilisation as well as the expected impact of the COVID-19 shock on public finances and growth”.

This comes after Moody’s put the country in junks status a week ago.

Cape Town – Mass evacuation plans are at an advanced stage to possibly move tens of thousands of people across four provinces in South Africa.

Entire townships in the Western Cape, Gauteng, the Eastern Cape and KwaZulu-Natal are to be moved to safe zones in a bid to halt the spread of the coronavirus.

It is a plan to de-congest extremely dense informal settlements to prevent infection rates. In the Western Cape alone, thousands of residents from two informal settlements in Khayelitsha are to be temporarily removed.

The communities of Taiwan as well as eNkanini informal settlements have been notified of the plans to have them evacuated from their homes.

According to National Department of Human Settlements spokesperson, McIntosh Polela, these plans were already at an advanced stage.

“While this is urgent, it is also an initiative that requires a sensitive approach.”

While he could not confirm the number of people who would be removed from their homes, he said consultations would need to take place as many have historically refused to leave places common to them.

“Historically, our communities have resisted being moved. As such, we are careful that they are consulted and assured that they are going to be moved not far from the current place of their residence. We also cannot communicate some aspects of this initiative because of the ongoing consultations,” he said.

“Several communities in four provinces have been identified for the temporary relocations. The measure is aimed at mitigating the impact of the Covid-19 outbreak.

The department of human settlements is however not giving out the names of the identified communities, “because we do not want to cause unnecessary panic. We recognise that moving people from their homes can be stressful, hence we will allow for consultations to take place before giving this information publicly,” added Polela.

Land parcels have been transferred from the Department of Public Works and other state entities.

The evacuation plans come as the Minister of Health Zweli Mkhize announced that the number of Covid-19 deaths had risen to nine with 1505 infections countrywide. Two of the nine deaths were still being verified.

Three of these deaths occurred over the last 72 hours in St Augustine’s Hospital. This prompted Netcare and the local Department of Health to partially close the hospital after it was found that none of the patients had a history of recent travel, and hadn’t been in contact with anyone with the virus.

Eleven nurses at the hospital tested positive for Covid-19. Measures included the closure of the hospital’s emergency department and stopping all new admissions.

Speaking at a multi-ministerial press conference on Friday, Mkhize said protective gear for health care workers was on the way after government engaged several countries who manufacture the equipment.

This followed threat of legal action by unions to force the government to deliver the required gear for the workers who are on the front line of the Covid-19 battle.

Mkhize said on Friday authorities were talking to China, India and Germany to supply South Africa with protective gear.

“We have written letters to India, we are talking to China and there are suppliers in Germany. Cosatu and National Education, Health and Allied Workers’ Union (Nehawu) have raised the issue and we are engaging them,” said Mkhize.

Nehawu was late yesterday drafting papers to file at the high court on an urgent basis seeking an interdict on behalf of its members against unlawful and reckless exposure to occupational risk to their health and safety by the employer.

South Africa has now experienced a full week in lockdown and law enforcement agencies continue to act against citizens who are not abiding by the rules.

By Friday, the police had released 2005 people on a warning to appear in court. A total of 7450 fines had been issued and 124 people had been granted bail.

But even with the army and police clamping down on citizens who are not obeying the law, the executive mayor of the City of Johannesburg, Geoffrey Makhubo bemoaned the fact that many were finding ways around the lockdown.

“We have observed that many people are abusing the use of the permits granted to them, permits are not being used for the necessary essential services meant to be. There will be no tolerance to those misleading the law enforcement, people who are not complying will be arrested,” he said.

IOL

• Two highly respected French doctors discussed on live television how a potential new treatment against Covid-19 should be first tested in Africa, “where there are no masks, no treatment, nor intensive care”.
• One of them, Jean-Paul Mira, even compared Africans to prostitutes who were the focus of previous Aids studies. “We tried things on prostitutes because they are highly exposed and do not protect themselves,” he said.
• Several soccer stars of African origin, including former Chelsea star Didier Drogba and former Barcelona striker Samuel Eto’o, tweeted their outrage at the two medics’ remarks.

A discussion between two top French doctors on live TV left viewers horrified when they proposed that Africa should become a giant laboratory for coronavirus vaccines testing because the continent lacks the resources to defend against the infections.

In the segment broadcast on the on French TV channel LCI, Jean-Paul Mira and Camille Locht raised the idea of testing new vaccines on impoverished African populations.

Mira is head of the intensive care department at the Cochin Hospital in Paris, while Locht is research director at the French National Institute of Health and Medical Research (INSERM).

“If I can be provocative,” said Mira, “shouldn’t we do this study in Africa where there are no masks, no treatment, no intensive care? A bit like we did in some studies on AIDS. We tried things on prostitutes because they are highly exposed and do not protect themselves.”

Locht agreed, saying: “You are right. We are actually thinking of a parallel study in Africa to use with the same kind of approach with BCG placebos,” referring to vaccination against tuberculosis INSERM says has appeared to protect children against infections, particularly respiratory ones.

“We will in fact think seriously about it,” he said.

The footage, broadcast on April 1, triggered a deluge of outrage accusing the doctors of white colonial attitudes.

Several of Africa’s leading footballers, including former Chelsea star Didier Drogba and former Barcelona striker Samuel Eto’o, also tweeted their anger.

Drogba, who is from Ivory Coast, tweeted: “It is totally inconceivable we keep on cautioning this. Africa isn’t a testing lab. I would like to vividly denounce those demeaning, false and most of all deeply racists [sic] words.”

“Welcome to the West, where white people believe themselves to be so superior that racism and debility become commonplace,” tweeted Ba, who is from Senegal. “Time to rise.”

INSERM, ranked as the world’s second-best research institution in the health sector, issued an official statement on Twitter alleging the proposal had been “wrongly interpreted” and included as hashtag saying “#FakeNews.”

On April 2, there more than 6 700 confirmed cases and 229 deaths of the coronavirus in the entire African continent, with many countries imposing a range of prevention and containment measures against the spread of the pandemic, according to African health officials.

France, meanwhile, has logged 59 105 infections and 5 387 deaths.

 

The six deaths as a result of police action were recorded in Gauteng, KwaZulu-Natal and Western Cape, while the two deaths in police custody were both in Limpopo.

Assault cases

Thirteen assault cases have been lodged with IPID, as well as 13 cases of police discharging an official firearm.

There were also three cases of corruption by police officials, which were recorded in Gauteng, KwaZulu-Natal and Mpumalanga.

A total of 38 cases was lodged with IPID since the start of the 21-day lockdown.

Excessive force

On Tuesday, News24 reported that police were facing three counts of murder, allegedly as a result of excessive force. IPID are investigating.

In Langa, Cape Town, a man was allegedly shot dead by police after he charged at officers with a knife during a chase.

In another case, a man died after being tasered by police in the Western Cape while he was on a beer run.

The number of deaths due to the police’s actions has dramatically increased. It, in fact, surpasses the amount of deaths due to Covid-19 in the country, which currently sits at seven.

Article by News 24

The organisation released its coronavirus policy recommendations to the government on Thursday.

CEO Frans Cronje said their research over the past couple of weeks shows that economic activity can continue while the country is on lockdown.

“Our advice is to do away with this distinction between health priorities and economic priority, implicit in that, the distinction between essential economic activity and other activity. Because if it proves impossible to get much of the South African economy back into operation as fast as possible, we expect that the pressure coming out of that will on people and households will see isolation protocols fail.”

Cronje added that economic regression will result in the same health crisis that the government is trying to avoid.

“If you are not ill and not in close contact with someone who has coronavirus, you do not need to wear a mask or gloves.”

The term “personal protective equipment” refers to a wide variety of protective items, including surgical face masks, N95 respirators, aprons, face shields or visors, goggles, and gloves.

This equipment is meant to be used when treating people who have an infectious disease, cleaning, or removing waste, the department said.

Higher risk of infections

“In general, PPE such as masks and gloves are only needed if you are in direct contact with or caring for a person who is confirmed or suspected to have COVID-19, at home or in a health facility,” the department said.

“Scientific evidence proves that by wearing a mask, if it is not needed, you may put yourself at higher risk because you fiddle with the mask and then transfer germs from your hands to your face.”

It added that wearing a mask and gloves when going to the supermarket or pharmacy to buy essentials during the lockdown period is unnecessary and will not protect you from the coronavirus.

Wearing this equipment in the belief that it will protect you when you are in public may result in the infection actually spreading faster, the department warned.

“The Health Department has developed clear guidelines for the general public. It advises the public to practice good hand hygiene, not touch your face, and to keep a distance of 1.5 metres from other people when you have to leave your home for essential items or medical care,” the department added.

“To reiterate, for the general public no PPE is needed.”

Confirmed cases

Minister of Health Zweli Mkhize announced on 29 March that the number of confirmed coronavirus cases in South Africa had risen to 1,280.

Additionally, Mkhize said that South Africa has suffered the second death of a patient who tested positive for the virus.

The deceased was a 74-year-old man who had been in ICU in a private hospital in Ladysmith. He had travelled to the Kruger National Park with his family and returned with flu-like symptoms.

“It has been reported to us that the deceased patient had an underlying skin cancer condition (melanoma), which had already complicated,” said Mkhize.

“The deceased’s family, 14 health workers, including 3 specialist doctors who were in contact with him, are now in quarantine and being monitored.”

Article by MyBroadband