The unexpected ground-breaking COVID-19 pandemic caused intercontinental challenges in social, political and economic development. These challenges are caused by lockdown measures carried out by governments to curb the spread of coronavirus disease. Unfortunately, African governments quickly rushed to complete lockdown without proper consultation in regards to the economic effects of these measures. Likewise, the halt of economic activities resulted in economic and labour shocks, especially for emerging and developing countries leading to exacerbated inequalities.
The pandemic affected various segments of the African population, specifically poverty-stricken communities. COVID-19 promotes a high level of inequality (Ozili, 2020), as most people in Africa depend on the informal sector, which relies on face-to-face interaction, not online. The informal sector in Africa represents over 82% of total employment (UNDP, 2021). It is important to note that not all those who fall under the informal economy are considered poor. Still, most are vulnerable to poverty with minimal resources to cope due to the impact of the pandemic. The statistics of over 82% illustrate that many African people require social protection programs to curb the social crisis caused by COVID-19.
Lockdown measures implemented by the South African government added to existing challenges experienced by the informal sectors. As citizens, we are facing obstacles to technology literacy, especially older people, as they depend on the physical purchase of goods and services rather than digital. Unfortunately, the lockdown regulations by the South African government did not consider street vendors and the elderly.
Rogan and Skinner (2020:11) argue that the South African Informal Traders Alliance and Women in Informal Employment Globalising and Organising influenced the state to intercede within the informal sector leading to the reopening of Spaza shops (informal businesses) amid COVID-19. As a result, the government approved a funding grant of ZAR30 million (approximately $1.7 million) to assist Spaza stores. It was administered under the Small Enterprise Finance to guard against the economic pressure brought by COVID-19 regulations.
However, the grant reached the minority as most are unregistered for Unemployment Insurance Fund. There has been an expansion to the informal sector because the unemployment rate is increasing in the formal part of the economy because people lost jobs. Expanding the informal industry means more people are opening businesses to earn. However, some small businesses have experienced pressure to survive through the COVID-19 measures, and the closure of enterprises can cause insecurity because negative economic pressure causes people to join protests quickly. As a result, the South African government initiated relief packages to assist people living in poverty.
Special COVID-19 grant initiative: relief package, is it a success?
South African government introduced an increase to Child Support Grant. This increase accounted for ZAR300 ($17) per child and ZAR500 ($29) per caregiver for five months. For six months, all the South African grants increased by ZAR250 ($14). These grants were introduced to reduce the socio-economic impact caused by COVID-19. In addition, the South African government introduced ZAR350 ($20) for the unemployed and those regarded as poor. However, the Unemployment Insurance Fund system caused the mass rejection of applications because of the old database. (Stats SA, 2020)
Although the grants introduced by the government are essential, they do not address the socio-economic reality of the grant holders. Firstly, the grant is not enough for basic needs and groceries. Secondly, they are below the South African poverty line.
Stats SA (2021:3)
The table above illustrates that the COVID-19 South African relief grants are below the poverty line. Stats SA (2021:3) demonstrates that in April 2021, an individual needed a minimum of ZAR624 ($36) per month to have a daily energy intake. Nevertheless, the South African government implemented an unemployment grant of ZAR350 ($20) per month, which is ZAR274 ($16) below the extreme poverty line.
According to Stats SA (2021), in March 2012, the extreme poverty line was ZAR366 ($21), demonstrating that the R350 ($20) 2020 COVID-19 grant is hugely lower than the extreme poverty line of 2012, and this is a crisis. Therefore, there is an indication that the government needs to increase the COVID-19 grant to address the socio-economic problem brought about by the pandemic.
COVID-19 impact on the South African youth
South Africa's inequality is the highest globally (World Bank 2020), whereby over 20% of the pollution falls under extreme poverty, and COVID-19 pushed millions of South Africans into poverty. Furthermore, the lockdown measures in the second quarter of 2020 caused a negative socio-economic impact resulting in approximately 13 million students without a good education and a further increased unemployment rate amongst this population (Zeufack, 2020).
The education sector in South Africa suffered; most people, specifical youth, were without education at the beginning of the COVID-19 pandemic. Educational institutions in South Africa followed the online learning route due to social distancing rules implemented by the government. However, the digital learning platform discriminated against those from poor backgrounds living in informal settlements, as they have no access to electricity. In addition, students and learners living in poverty did not have the means to buy data, and the e-learning method further disadvantaged them.
COVID-19 did affect the poor not only economically but also negatively affected their human rights. The South African COVID-19 regulations failed to protect the poor from the plight of poverty. Education remains a fundamental human right. However, online platforms deprived students of the right to education because of no access to electricity and internet connectivity at home, placing them in an unfair scenario compared to students living in urban areas.
What needs to be done?
The African governments followed the ‘copy and paste’ method regarding lockdown. African nations copied lockdown measures implemented by Europe and China, forgetting that their economies are superior. African economy consists of over 80% informal sector. Traders and street vendors felt the wrath of the lockdown regulations as their marketing and selling strategies depend more on physical interactions. The African governments implemented a social distancing rule because COVID-19 was framed as a threat to national security, convincing the public that the measures followed were necessary.
- Social security remains essential as it can be used to reduce poverty. Financial support for poor people is necessary to mediate the damaging socio-economic crisis. In addition, through social security, the government can reduce the high level of protests caused by economic distress.
- The government needs to relook at the ZAR350 COVID-19 grant if the plan is to address poverty because it is below the extreme poverty level line.
- The South African government needs to plan before implementing strict lockdown measures properly. Lockdown regulations came with dire economic consequences due to rushed decisions. It needs to be noted that Africa is not in the same monetary stance as China and Europe. Therefore, there is no need for COVID-19 regulations to be the same as developed nations.
- Since the South African government states that it is ready for forth-industrialization, COVID-19 exposed the unreadiness. However, the government should not ignore the gap between private and public schools. There are serious investments needed towards public schools, as they are behind in terms of technology.
International Labour Organisation. 2020a. COVID-19 and the World of Work: Impact and Policy Responses. Geneva: ILO.
Ozili, P.K. 2020. COVID-19 in Africa: Socio-economic impact, policy response and opportunities.
Rogan, M. & Skinner, C. 2020. The Covid-19 crisis and the South African informal economy.
Statistics South Africa. 2019. National Poverty Lines.
Statistics South Africa. 2021. National Poverty Lines.
Statistics South Africa. 2021. SA tourism industry struggles amidst the COVID-19 pandemic.
United Nations Development Programme. 2021. Amidst the COVID-19 pandemic, a new UNDP report in collaboration with ILO advocates for social protection for workers in the informal economy.
World Bank. 2020. South Africa COVID-19 response development policy operation (P).
Zeufack, A. G., Calderon, C., Kambou, G., Kubota, M., Cantu Canales, C., & Korman, V. 2020. Africa’s pulse, no. 22, October 2020: An analysis of issues shaping Africa’s economic future. World Bank.