South Africa, on the other hand, does not have the means to put extensive financial measures in place. Also, on the 28th of March, Moody’s downgraded South Africa’s sovereign credit rating to “junk” status. This means that South Africa does not have the money, nor the creditors to put extensive financial measures in place. This is an economic problem; however, it can lead to even more problems in terms of the spread of COVID-19. South Africans in isolation, not being able to go to work or receive an income, will only be able to stay in isolation for as long as they have the money for essential items such as food and hygiene products. When the money runs out, South Africans will have to go back to work which could result in the virus spreading even more when people return to work and come in close contact with one another.
After President Cyril Ramaphosa announced the 21-day lockdown, which has now been extended until the end of April, the Department of Small Business Development launched a debt relief fund to help SMME’s mitigate the economic turmoil that this lockdown has in store. However, this fund is far too small. In the worst-case scenario, businesses will have to let staff members go to keep their businesses afloat.
However, it is not all doom and gloom. The current crisis is prompting the South African government to put measures in place that it should have put in place a long time ago. For example, Lindiwe Sisulu, Minister of Human Settlements, Water and Sanitation announced that communities will be gaining access to clean, running water.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
