The Coronavirus pandemic has had a severe impact on all the economies of the world, both the rich and the poor. While the richer and the more developed economies have more resources to think of ways to combat this virus, the under-developed or developing economies are struggling a lot more to combat this problem.
And now half of the South African manufacturing industry has collapsed during the lockdown with resources becoming scarce and the production facilities going under complete lockdown. These factors have caused the country’s manufacturing sector to decline by 49.4% this year.
According to StatsSA, a government statistics agency, the production of motor vehicles dropped by nearly 98% and the basic iron and steel production went down by 65.4%. Moreover, the production of petroleum, chemical products, rubber and plastic products declined by 41.5%.
However, the food and beverages production were less hit with only 19.4% decline in production. Also, the country is in a double-trouble situation because it is already in its second period of recession when the COVID pandemic came.
Finance Minister Tito Mboweni did not sound optimistic about the country’s growth as he estimated a 7.2% plunge in the economy’s growth.
South Africa’s President Cyril Ramaphosa has warned the masses of huge loss of jobs which could put the country into deeper problems as the country’s unemployment rate is already high.
When the Government announced total lockdown, it led to disastrous consequences for the country as health minister Zweli Mkhize stated that the country had not yet reached its peak stage. The Government has been trying all measures to improve the state of the economy including gradually reducing lockdown measures to increase economic activity.
Moreover, the country is seeing the highest number of COVID cases in sub-Saharan Africa with 2,38,000+ cases and 3,720 deaths so far.