MEC Nomusa Dube-Ncube on Coronavirus Covid-19 KwaZulu-Natal Economic and Business Impact Assessment

South Africa: Media Alert shorts statement by the MEC for Economic Development, Tourism and Environmental Affairs Nomusa Dube-Ncube during the sitting of the KZN Economic Council.

In my capacity as the chair of the KZN Cabinet Economic Cluster, today I received a Covid-19 KZN Economic and Business Impact Assessment Report.

This follows a survey conducted jointly by the Department of Economic Development, Tourism and Environmental Affairs, KZN Business Chambers Council and University of KwaZulu-Natal Graduate School of Business.

The survey was conducted during the transition from COVID-19 Level 4 (15-31st May) to COVID-19 Level 3 (1st -15th June).

All the members of the KZN Economic Council have noted with a high level of concern the report which shows the devastating impact of COVID-19.

In particular, we have noted that 30.5% of both employers - employees are experiencing mental health issues such as anxiety and despair.

We further noted the following:

At 45, 7 % - employees and staffing levels are severely affected to the extent that salary cut had to be introduced. Employees have been temporarily laid off;

29, 7% - employees have been required to take paid leave. Wages remained normal only through UIF TERS support;

The decline in demand for products and services by 90%, during COVID-19 Level 5 and 4 in KZN resulting in reduced cash flow and inability to meet operational costs and fixed asset repayments;

Reduced sustainability of business with 14.5% going into liquidation /mothballing during the period of the survey.

The KZN Economic Council has agreed that more studies need to be conducted to assess the impact on workers and informal business in the township and rural areas.

In addition, big business and social partners in the council have agreed to strengthen the implementation of concrete plans geared towards the re-engineering of the provincial economy.

We have agreed that we need to channel our energies and resources towards building local capacity. The outbreak of COVID-19 has exposed our economy and showed that we are only consumers of goods.

As we move forward, we want the people of this province, across all corners, to be skilled and be given the support that would enable them to produce local products for domestic consumption and exports.

I have stated that the lockdown regulations, which resulted in the disruption of the global value chain, should be viewed as a blessing in disguise. The lockdown has presented as indigenous people with the opportunity to be self-sufficient and produce their own goods.

I have mandated the department to finalize the KZN Localization Framework so that we ensure that local people benefit from economic opportunities at the local level.

We have agreed to speed up huge investment in infrastructure by the government and the private sector. We believe that such investments will result in a higher growth rate, especially in the construction sector than many other sectors.

The meeting of the council is currently underway and I promise to communicate more resolutions of the council as we move forward.