Up to 2-million jobs could be lost in Gauteng’s version of Great Depression

Gauteng, SA’s economic powerhouse, will move to a less restrictive lockdown level at the beginning of June, which will provide much-needed relief from an unprecedented economic and human catastrophe, according to premier David Makhura.

Addressing a virtual sitting of the provincial legislature, Makhura said the province, which ordinarily contributes more than a third of the country’s GDP, could lose as many as 2-million jobs. Gauteng had about 15-million people in 2019, according to Statistics SA data.

The country has been under a state of disaster due to the Covid-19 pandemic for more than two months, most of it under a strict national lockdown that is being lifted in phases. The phases range from level 5 at its strictest to level 1 at its most relaxed.

Nationally, the country is at level 4 and President Cyril Ramaphosa has promised a relaxation to level 3 at the end of May, though he said regions could move at different speeds based on infection rates. Business for SA has called for a swift move to a lower level, which would remove restrictions on virtually all sectors, including retail, construction and mining as well as domestic air travel and car rental services.

“Gauteng will be going to level 3 at the beginning of June,” Makhura said.

He emphasised that the province would move as a whole because the region is too integrated for a fragmented approach. Business leaders have also warned against a tiered relaxation, which would not make sense with complex supply chains that depend on interconnected operations between provinces.

Gauteng initially had the largest number of Covid-19 cases but benefited greatly from one of the strictest lockdowns anywhere in the world, under which airports such as OR Tambo, the busiest in Africa, and Lanseria International Airport have been closed.

That has, however, come at a huge economic and social cost, with more than 600,000 people receiving food parcels from the provincial government since the lockdown was imposed at the end of March. The province cannot stay at level 4 for too long as many people do not have the means to support themselves and the province does not have enough resources to provide assistance indefinitely, Makhura said.

The economic effects of Covid-19 will be like that of the Great Depression almost a century ago, the premier said.

The modelling done for the province looked at the worst- and best-case scenarios in terms of job losses, he said. In the best-case scenario the province would lose almost 900,000 jobs, which could reach up to 2-million in the worst outcome.

The “road ahead will be tough and painful”, he said, adding that the peak in Covid-19 infections will only arrive later in 2020.

“We are ready for the worst of times. We will continue to build capacity for that worst of times,” the premier said.

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