Answer to Question #316661 in Management for Ande

Question

Discuss the prevalence of the COVID-19 pandemic in South Africa (Economy of SA).

Answer 1

The negative economic implications of COVID-19 have not been evenly spread across the population in South Africa. In a country that registers the highest inequalities in the world and where approximately 20% of the population lives in extreme poverty, COVID-19 threatens to push 3 million South Africans into poverty. While higher income professionals and managers have been able to maintain physical distancing, areas of high transmission have emerged in dense zones with workplace clusters, affecting mainly manual workers in mining, manufacturing, retail and services. Survey data suggest that traditionally more vulnerable groups, such as women, black Africans, youth, and less educated groups, have been disproportionately negatively affected (Ranchhod & Daniels, 2020). For young people in particular, the lock-down during the second quarter of 2020 left approximately 13 million students without adequate education in a country where already 80% of students experience learning poverty , and the high unemployment rate among this segment of the population has been further aggravated by the decline in economic activity (Zeufack et al., 2020).

In an initial survey of almost 6,100 adults aged 18 to 59 conducted in March-April 2020, results showed a decrease of employed individuals in the sample from 57% in February to 48% in April (Ranchhod & Daniels, 2020). For young people aged 18 to 29, data from the same survey shows a decrease in employment rates from 42% to 35% between February and April, impacting a country which already registered 29.1% unemployment before the pandemic, with almost twice the rate in the case of young people (World Bank, 2020). In the second quarter of 2020, 2.2 million people lost their jobs (Francis, 2020) as South Africa was subject to widespread lock-down restrictions, driving a year-on-year contraction in real gross domestic product (GDP) of 17.1%, with an expected decline in the overall 2020 GDP of 7.2% (Zeufack et al., 2020). This would mark six consecutive quarters of negative GDP growth given that the economy was already in decline during the second half of 2019 (Erero & Makananisa, 2021)