The extension of the national lockdown period with a further two weeks will inevitably cause cash-flow to dry up, the economy to grind to a complete standstill, unemployment to skyrocket and ultimately, famine as well as social and political tension.
The government must urgently find a way to strike a balance between the lockdown regulations, aimed at restricting the impact that Covid-19 will have on society, and economic policy, which must be amended to not only bring relief, but also stimulate economic growth.
It is time to make drastic changes to policy on national level to facilitate economic stimulation. The government must do away with its centralised, socialist, state-controlled obsession and put a moratorium on its unsustainable and ideologically driven quota legislation, like Broad-Based Black economic empowerment (BBBEE) and Affirmative Action (AA). All local expertise must be employed to stimulate the economy and the development of rural and community economies, which are less dependent on imports, must be offered sufficient support. Market forces and entrepreneurship must be encouraged. A further contraction of the South African economy will result in a very long recession as the economy is already weak due to poor governance, corruption, state capture and the downgrade by several credit rating agencies.
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