Implications of COVID-19 Lockdown on South African Business Sector

Abstract

The COVID-19 pandemic in South Africa spelt untold adversity on many businesses in the country. This is attributable to the precautionary measures implemented by the South African government to contain the ferocious disease spread across various levels in the society. This article examined the many implications of the pandemic on the business sector in South Africa through the period just before June 2020. The article adopted a qualitative approach to critically examine the implications of the COVID-19 pandemic on the business sector in South Africa. It utilised Statistics South Africa’s reports and contemporary literature on the effects of COVID-19 on the business sector which was used as a source of reference. The statistical evidence is based on experimental data for May 2020, as derived from over a thousand registered businesses operating within the formal sector from various industrial groupings in South Africa. The period under review is remarkable because the business's effect of the pandemic became visibly alarming while the lockdown phases were reduced from Level 5 to Level 4 within the period. The private sector of the economy, known for its huge economic sustenance of most of the country’s labour force, was already at the firing line as all ‘nonessential’ businesses succumb to government’s strict regulations on socioeconomic activities during the phased lockdowns. The hitherto struggling economy, barely sustained by this sector, eventually caved in with over half of its gross domestic product, shrinking attributable to the unparalleled adverse effects that attended the dreaded pandemic. Although government is still battling with the nation’s economic recovery process, many businesses counted their losses from the first few months of the lockdown, as portrayed by plentiful evidence from the national statistical body.