Economy bleeds, unemployment at all-time high

Tomorrow marks exactly a year since President Cyril Ramaphosa the Covid-Igenforced national lockdown: and since then a trail of economic devastation and jobs bloodbath continue to haunt many South Africans.

When Ramaphosa announced the initial 21—day Lockdown, SA’s Covid-19 infections had spiked from 61 to 402 in a space of eight days and a drastic intervention was urgently needed. “While this measure will have a considerable impact on people’s livelihoods. on the life of our society and on our economy, the human cost of delaying this action would be far, far greater,” he said at the time.

The alert level 5 lockdown came with strict restrictions and people were only allowed to leave their homes when seeking medical care, buying food, medicine, and other supplies, or the collection of social grants. Travel bans were imposed and only essential industries were allowed to operate while others ran at limited capacity.

By mid-year, some of the restrictions were eased while others stayed in place for months. According to the Institute for Economic Justice (IEJ). at least 1.4m jobs were lost in the past year, which has seen the unemployment rate breaking new and unprecedented grounds at 32.5″.

“These findings highlight the disastrous effects of the economic lockdown and the pandemic on employment levels and provide further evidence to support the need for ongoing rescue and relief measures [including income support and public employnient],” said IEJ researcher Julia Taylor yesterday. “The second hard lockdown saw many businesses reducing working hours and significant negative impacts on sectors such as tourism and retail. The R500bn Covid-19 rescue package announced by the president in April 2020 held hope and promise for many. It came at the start of a period of serious economic devastation. “However, based on available data, only around one-third of the rescue package has materialised. The measures initially announced by the president did not take into account the extended lockdowns and associated economic disruptions.”

The government also pumped money towards the Temporary Employer/Employee Relief Scheme (Ters) which was supposed to benet those whose incomes and services were affected by lockdown, but it was also marred by corruption committed largely by employees at the department of employment and labour. In some cases, businesses and employees never received their Ters.

Economist Busi Sibeko said the government needed to prioritise economic recovery and that Ters was still needed be—
cause many businesses had not recovered. “The government also needs to prioritise households because many
people have not been able to bounce back from this pandemic which has ripped homes apart. It‘s a humanitarian issue.” she said. Neil Roets, CEO of Debt Rescue, a debt review firm, said the payment holidays that many creditors offered to their customers last year are starting to have negative outcomes.

“Credit providers are now aggressively pursuing collections after the end of payment holidays. we are in for a very rough ride “The good news. however, is that the demand for new credit is falling, and lenders have tightened their risk approach to new applications. “There is a silver lining to these dark days. Consumers are being cautious about taking on more debt, which is positive thing. But they are still buried under mountains of debt incurred during the past year, and well before the pandemic even started: 2019 was by no means a good year, either,” said Roets.

Like
Like Love Haha Wow Sad Angry

Thank you!

We look forward to the opportunity to get you debt-free!

Did you know?

You can start your application process already. Simply download your assessment or fill in our online application and get one step closer to becoming debt-free with Debt Rescue!

Subscribe to Our Weekly Email