Western Cape ‘lost R1bn a day’ during level 5 of coronavirus lockdown

16 May by Tshego Lepule

Cape Town – THE Western Cape economy bled R1billion for each day under level 5 of the lockdown and continues to lose revenue under current restrictions.

This emerged as the provincial legislature’s ad hoc committee on Covid-19 was briefed by the provincial department of economic development as well as the national departments of small business and employment and labour on the impact of the virus on the economy and livelihoods of citizens. 

With the provincial government lobbying hard to have the Western Cape go down to level 3 when restrictions are eased, the burden of strict regulations on small businesses and workers was highlighted during the briefing.

Head of department for Economic Development Solly Fourie said while the R1bn loss decreased as the restrictions eased, they were readjusting accumulative losses as the lockdown levels were adjusted.  

Fourie said their recovery plan focused on the economy and workers and considered the critical necessity of income for households.

MEC David Maynier said some models for the recovery plan had already been drafted and submitted for peer review processes but stressed it was important for the province to have more sectors reopen in a safe manner.

For the tourism sector, which is a major contributor to the provincial economy, around 104 000 jobs were lost due to Covid-19 and R13bn lost for 2020 which amounts to an 83.9% loss when compared to the previous year.

“We are in the first phase focusing on ensuring that firms in tourism survive and get support from government funding schemes,” said Maynier.

“We have to look at how the sector will be accommodated under level 3 and we will start working with the national department on submissions to open this sector. Borders will remain closed but there is a push leaning to open some attractions and restaurants.”

Small, medium and micro-enterprises (SMMEs) in the province have also been flagged as a sector in need of support. However, despite the relief fund schemes on offer from the national government, the province seems to be lagging in terms of how many businesses, particularly in the informal sector, are using it.

The Spaza shop and General Dealer Fund, which is meant to supply a R7000 relief package to tuckshop owners has only had five applications from the province, of which only three were approved. Around 199 SMMEs applied for debt relief which saw around 3088 jobs saved.

John Peters from the Department of Economic Development said a big challenges was accessibility, with Nedbank being the only bank facilitating this with the Department of Small Business. The fact that the Western Cape had one supplier where they can go and make sure of the R3500 to buy stock. This was an issue the national Department of Small Business’s Mzoxolo Maki said they were working to resolve as they were in discussions with other banks.

And with more and more businesses reopening a concern was raised around compliance with regulations in the province, which stands at 56% with 44% of companies that were not compliant.

This came out after 3094 inspections were conducted over a seven-week period where 1573 notices were issued to enforce compliance. The province’s department of economic development said after a week of opening a hotline for employees to lodge complaints over non-compliance, they had received 118 complaints.

The Department of Labour’s Sam Morotoba said despite R1.6bn paid in UIF funds to cover 362129 employees, this figure was still low for the province and they still were confronted with employers who held on to the money to obtain interest instead of paying workers once the money was received.

Source: IOL at https://www.iol.co.za/weekend-argus/news/western-cape-lost-r1bn-a-day-during-level-5-of-coronavirus-lockdown-48011060