This was the message from South African Revenue Service (SARS) Commissioner Edward Kieswetter during the second Investec "Road to Economic Recovery" webcast. This episode follows the first webcast with scenario planner Clem Sunter and Investec Treasury Economist Tertia Jacobs.
Kieswetter was joined by Investec Bank SA CEO, Richard Wainwright and David Gracey, head of Investec's Fixed Income, Currencies, and Commodities (FICC) Trading Desk.
“There has been a significant loss of economic capacity,” says Kieswetter. “Taxes are down, and consumer activity is contracting. Many companies may not recover, and the jobs lost will be hard to restore.”
Wainwright acknowledged that sectors such as tourism, hospitality, property, mining, construction and certain types of retail have been particularly hard hit – with some firms seeing revenues of zero overnight and many likely to take a long time to recover.
The impact of the Covid-19 crisis on jobs in South Africa
“We are concerned about a too-slow lifting and what this could do to jobs – we’re looking at 4.9 million jobs potentially being lost over the next few months,” warned Wainwright.
“It is crucial therefore to get the balance right between opening up the economy and controlling the spread of the disease. There are a substantial number of variables in play. Were we able to move the peak of the transmission outside of our winter season? What will be the economic impact and what about the psychosocial impact - which could affect willingness to go back to a normal life, even after restrictions are lifted? Unfortunately, there are no binary answers.”
Keiswetter also encouraged decision makers to think about each industry not as disconnected sectors, but rather as complex systems and value chains. Removing lockdown regulation for example in one sector, may have upstream or downstream dependencies on another. He also pointed to the fact that we cannot simply think of reopening of an economy to restore the status quo because that assumes that everything was right before.
“Going forward, we have to think of problems as collective South African problems, not other people’s problems. We cannot think of reopening just to restore the status quo, we need to bring our collective ingenuity and human endeavour to address and reimagine our South Africa. We continue to fight with each other instead of fighting for each other and if Covid-19 doesn’t wake us up, nothing will,” concludes Kieswetter.
About the author
Patrick writes and edits content for Investec Wealth & Investment, and Corporate and Institutional Banking, including editing the Daily View, Monthly View and One Magazine - an online publication for Investec's Wealth clients. Patrick was a financial journalist for many years for publications such as Financial Mail, Finweek and Business Report. He holds a BA and a PDM (Bus.Admin.) both from Wits University.
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