Government eased lockdown to stave off economic 'massacre' in tourism sector

21 June 2020 - 00:04 By S'THEMBILE CELE and SIBONGAKONKE SHOBA
Mmamoloko Kubayi. File photo.
Mmamoloko Kubayi. File photo.
Image: Trevor Samson

President Cyril Ramaphosa's announcement of the reopening of a range of businesses this week followed warnings of a major jobs bloodbath in the stricken tourism industry.

Ramaphosa said on Wednesday the cabinet had decided to allow restaurants, hotels, casinos, movie theatres and other tourism facilities to resume operations under level 3 of the lockdown.

The president also cleared the way for the reopening of small businesses such as beauty salons after it became obvious that the government did not have enough financial aid available to stave off an economic "massacre" in the sector.

In an interview yesterday, tourism minister Mmamoloko Kubayi-Ngubane said she had told her cabinet colleagues that about 30% of the country's restaurants have already had to close permanently.

The hotel industry expected to lose between 550,000 and 600,000 jobs if it could not resume business, she said.

In making her case, Kubayi-Ngubane spelt out how freezing the tourism industry had knock-on effects for other sectors such as agriculture, aviation and fuel supply.

Reports suggest that at one time the National Treasury feared the economy could lose as many as 7-million jobs in a worst-case scenario.

On Friday, the Marriott Group announced that it would shut three well-known hotels - in Magaliesburg, Hazyview and Durban - as a direct result of the Covid-19 lockdown.

Kubayi-Ngubane said the process of putting together a strong case for the industry kicked off immediately after it was forced to shut down under level 5 regulations at the end of March.

Industry bodies were instructed to draft the protocols they would put in place to prevent the spread of the virus in their establishments. These were then sent to health minister Zweli Mkhize for comment.

Kubayi-Ngubane also sat down with her cabinet colleagues Tito Mboweni, minister of finance, and Gwede Mantashe, minister of mineral & energy resources, to look at ways of ameliorating the economic impact.

"We were able to prove to the Natjoints [the National Joint Operational and Intelligence Structure] and the NCCC [National Coronavirus Command Council] that we had taken into consideration the risk factor, we are putting mechanisms in place in the sector to make sure we can protect lives," she said.

"We said we hear the concerns around the issues of health. We hear the concerns about being responsible… but the reality is that businesses are closing in the tourism sector.

"Then you talk about agriculture. It provides fresh fruits, vegetables and flowers to the tourism sector. While they have been operating from level 5, they have not had clients. So it means indirectly they have been affected.

"Because flights have not been moving, you'll see the impact in terms of the aviation industry not being able to purchase fuel, so your petroleum sector will be affected," Kubayi said.

The minister of small business development, Khumbudzo Ntshavheni, told the Sunday Times the lockdown had been eased for the sector because of the lack of state aid. The only way small businesses could survive was by reopening.

Ntshavheni said her department had calculated a need for R13bn in aid, which could be cut to R9bn at a pinch, but government coffers could offer only R500m.

"So if you can't give relief to these businesses, you need to do something to allow them to come back," the minister said.

"But also the numbers in terms of the devastation on the economy were starting to show a proper massacre. We said for that reason let us bring them in.

"Then there was also the medical advisory to say that this thing is going to be with us for a while. Covid-19 is not going to end in September or whenever the peak is, it will be here for a while. So we must start to get our people to live with it."

Ntshavheni said protocols for small businesses had been ready since the first week of June but first had to undergo scrutiny by the medical advisory committee.

"They are not foolproof, they will have flaws, but there is sufficient thought put into it," she said.

"The responsibility is now with South Africans who will go to the massage parlour, to the hair salon and so on, to make sure that what we have said is adhered to." 


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