South Africa’s economy could contract by as much as 8.2% this year, with only a limited recovery next year, should the country be hit by a second wave of infections in October and November, the Organisation for Economic Co-operation and Development (OECD) warned in a new report.

In its annual survey of South Africa, released yesterday, the organisation urged a ‘prudent’ approach to public sector wages, and urgent reforms to ensure state-owned enterprises (SOEs) were sustainable.

It blamed the underperformance of SOEs on mismanagement, corruption, overstaffing and an uncontrolled wage bill. Reforms should include a reduction of staff and the introduction of private-sector players.

According to a Fin24 report, the OECD predicted a contraction of -7.5%, in the case of a single outbreak, which would worsen to -8.2% if a second wave occurred. The contraction would inevitably translate into higher unemployment.

The news report noted that the group’s predictions for economic contraction were more severe than the 7.3% slump in GDP anticipated by the SA Reserve Bank.

Parliament’s Portfolio Committee on Social Development was told yesterday that while, prior to the Covid-19 pandemic, 23.8% of the population – about 14 million people – faced extreme hunger, the figure was expected to soar to catastrophic levels, according to News24.

The department’s acting director-general, Linton Mchunu, said in a presentation: ‘Since the outbreak of Covid-19 more than five million people have been fed by the department in partnership with various organisations as well as other ordinary citizens. Though this is not enough, it has certainly gone a long way in alleviating the unforeseen devastating impact of the Covid-19 pandemic.

‘Statistics SA projects the economic impact to leave about 50% of the population at risk of being food insecure. So more still needs to be done.

‘The gap is still very … large and we are doing our best (but)… we are not going to make it alone. It’s not possible. We need a level of partnership between the private sector and civil society to be able to meet this great need. We still require a whole lot of money. What we require is R868 million that is just for a period of three months,’ he said.

Meanwhile, the government’s efforts to address the pandemic and the economic crisis arising from the lockdown continues to be dogged by corruption. It was reported that the Hawks in Mpumalanga had raided the Nkomazi Municipality over alleged Covid-19 tender fraud to the tune of R27 million.

Hawks spokesperson Brigadier Hangwani Mulaudzi said: ‘The operation follows investigations in relation to alleged Covid-19 procurement fraud wherein the appointment of contractors and service providers were inconsistent with the requisite procurement regulations.’

The Daily Maverick reported that the Free State Provincial Treasury had awarded contracts to two companies owned by the sons of former Free State Premier and current African National Congress (ANC) secretary-general Ace Magashule, Tshepiso and Thato Magashule. The contracts had a combined value of R2.7 million. The report said two sources ‘familiar with the Free State’s political environment allege that Magashule and the provincial treasury’s MEC, Gadija Brown, are close’.

IOL reported last night that a social media campaign by the ANC, #ANCFriday, intended to boost support in the face of flagging loyalty over the week’s corruption revelations backfired when #voetsekANC started trending instead.

Earlier, images of black, green and yellow hearts as well as ANC flags flooded social media timelines, but the posts were overtaken by angry South Africans disgusted by corruption and the state of the country.

Positive cases grew in South Africa yesterday by 11 014 to a cumulative total of 493 183 (with 326 171 recoveries). Deaths rose by 193 to 8 005.

The highest tally of cases is in Gauteng (175 272), followed by the Western Cape (95 223), the Eastern Cape (77 055) and KwaZulu-Natal (76 706).

In other virus-related news

  • The World Health Organization reported a record increase in global cases on Friday, with the total rising by 292 527. The biggest increases were from the United States, Brazil, India and South Africa. Deaths rose by 6 812. The previous WHO record for new cases was 284 196 on July 24; and
  • Reuters reported that nearly 40 countries had reported record single-day increases in infections over the last week, about double the number in the previous week.


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