SA can’t campaign against travel bans but restrain its economy

Can the SA government afford to restrict its domestic economic activity while complaining about “knee-jerk and unscientific” restrictions on international travel by developed countries after the discovery of the Omicron variant?

That should be the question that preoccupies the National Coronavirus Command Council (NCCC) as it considers the recent sharp increase in the number of Covid-19 infections.

From a health perspective, we need to do everything possible to save lives. Drastic, sometimes less rational decisions have been taken before on the basis of this. These include the issue of what goods can be sold.

Past recommendations of the ministerial advisory committee on health have ventured into economic and social restrictions. The fourth wave provides an opportunity for the committee to provide health-specific advice — how to maximise the impact of vaccines as the main pharmaceutical intervention available.

It should also provide a view on what needs to change from previous lockdowns now that hospital admissions appear to be lower than those experienced in the previous waves. The past four alcohol sales bans were implemented using the health argument that, rightly or wrongly, they would decrease hospital admissions.  

From a fiscal perspective, all indicators show the country cannot afford another set of economic restrictions. Our GDP shrank 1.5% in the third quarter of 2021. When you add the economic impact of 90 countries imposing travel restrictions on SA, it becomes almost certain that the government’s economic growth forecast of 5.1% for 2021 will not be met.

PwC, which has put its growth GDP forecast at 3.8%, estimates that the international restrictions will cost SA R6.5bn in lost foreign revenue for the fourth quarter of the year.

The employment situation is even more depressing. Stats SA recorded the official unemployment rate at 34.9% in the third quarter due to the impact of lockdowns, power supply interruptions and the July unrest. The expanded definition of unemployment, which includes those who have given up seeking jobs, is at 46.6%, a big risk factor for further political unrest.

One anticipates the new mayors of Ekurhuleni, Johannesburg and Tshwane metros will be opposed to further restrictions of activity in the Gauteng region.

The country’s politics have also changed since last month’s local government elections, which saw the ruling ANC’s electoral support dipping below 50% for the first time since the advent of democracy. The Presidential Co-ordinating Council, made up of premiers and mayors — all Gauteng mayors are from the DA — will meet for the first time to consider Covid-19 response measures.

Judging from Cape Town’s past approaches, one anticipates the new mayors of Ekurhuleni, Johannesburg and Tshwane metros will be equally opposed to further restriction of activity in the Gauteng region, the powerhouse of the economy.

EThekwini will have to decide whether it can afford another December of restrictions. Durban, with its warm weather and beaches, is by far a destination of choice for domestic summer travel.

Previous lockdowns have demonstrated the extreme level of connectedness or interdependency between tourism, hospitality and alcohol sales. The best demonstration was the decision by Sun International to close its hotels and casinos when lockdown level 4 was introduced in June. While hotel operations were allowed, the decision to close restaurants, alcohol sales and casinos made the group’s operations unviable.

These are the type of decisions one hopes the government will seek to avert after learning from past experience. Having experienced first-hand the frustration of pulling SA off the UK’s travel red-list, only to put it back on immediately after the Omicron announcement, we urge the government to approach things differently this time. We hope it also appreciates the value of consultation with affected sectors in the application of restrictions, after being at the receiving end of unilateral decisions thereon. 

Certainly, our government cannot campaign against international travel restrictions, which are grossly unfair on the Southern Africa region, while considering restricting its own economic activities, including alcohol sales, tourism and hospitality. These sectors have carried the highest burden of the past 626 days of the national state of disaster and have lost the most.

Sibani Mngadi is spokesperson, SA Liquor Brand Owners Association