KZN economy tanks as unemployment soars during Covid-19

12 May 2020 - 18:41 By Zimasa Matiwane
Employment levels in KwaZulu-Natal are expected to fall in both formal and informal sectors, premier Sihle Zikala told the provincial legislature on Tuesday.
Employment levels in KwaZulu-Natal are expected to fall in both formal and informal sectors, premier Sihle Zikala told the provincial legislature on Tuesday.
Image: 123RF/nirut123rf

The KwaZulu-Natal economy is expected to shrink by about 8%, while unemployment is expected to hit 27%, according to premier Sihle Zikalala.

Zikalala was addressing the Workers Parliament held by the provincial legislature on Tuesday.

He said the absorption of new entrants into the labour market was also expected to fall due to structural challenges associated with hiring during the lockdown. 

"We expect employment levels to fall in the formal economy - particularly in tourism-related sectors and manufacturing - and again in the informal sectors," he said.

"The impact is expected to be particularly high in the sectors such as tourism, hotels and restaurants, aviation, manufacturing, real estate and business services."

To mitigate this, Zikalala said the KZN government is strengthening the social safety net for the most vulnerable members of the province and also removing red tape to ensure swifter economic recovery.

While the provincial government tries to contain the spread of the virus, they are working on an economic recovery plan and supporting local enterprises to access national relief funds.

"Various support measures have been set up, including an electronic app to log queries on business challenges and for assistance to complete the business support measures applications," said the premier.

"The KZN Growth Coalition, comprising labour, business and government, has raised significant financial and non-financial support to mitigate effects of Covid-19."

In the informal sector, the provincial government's measures include:

  • issuing permits rather than complicated business licenses;
  • reducing or scrapping licence fees and renewals; and
  • support for spaza shops in townships and rural areas.

"We are a pro-poor developmental state and a listening government. This is a time to unite, close rank and work together to save jobs and rebuild our province," said Zikalala.

As the lockdown is eased, he said the government was committed to working with labour in prioritising the safety of all workers in the province. 

"As we speak, Covid-19 has shown us that our healthcare workers, our police, our soldiers and even our correctional officials remain vulnerable to the threat as they have been also infected."

Zikalala also paid tribute to all people who continue to work, despite the risks they are exposed to, for the greater good of South Africa. 


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