Cyril’s reality check to SA: a ‘job-loss tsunami’ is coming

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Cyril’s reality check to SA: a ‘job-loss tsunami’ is coming

President warns of dark days ahead as taxi owners revolt over state Covid relief and the DA calls for end to lockdown

Iavan Pijoos, Zingisa Mvumvu and Shonisani Tshikalange
Transport minister Fikile Mbalula says there is no way the government can afford paying each taxi R20,000 as part of Covid-19 relief funds.
Transport minister Fikile Mbalula says there is no way the government can afford paying each taxi R20,000 as part of Covid-19 relief funds.
Image: Thapelo Morebudi

President Cyril Ramaphosa warned on Monday that difficult financial times lay ahead, as the DA demanded a complete abandonment of the lockdown and the taxi industry protested against the R1bn relief offered by the government.

Ramaphosa, in his weekly newsletter, said the reality was that it would take a long time for the economy to recover to what it was before the pandemic.

This came as DA finance spokesperson Geordin Hill-Lewis suggested that the lockdown in its current form be abandoned completely to reboot the economy and save livelihoods.

Their comments came on the same day that taxi drivers embarked on a strike in KwaZulu-Natal to voice their dissatisfaction with the government’s R1bn relief offer to the industry crippled by the lockdown.

Transport minister Fikile Mbalula rejected their demand for R20,000 per vehicle, saying he could only offer R5,000.

“There is no one who is going to win out of this. If we calculate the loss that the taxi industry has incurred as a result of the shutdown, it goes to billions,” he said. “I cannot say the money is enough – it is a ‘relief’.”

Taxi operators predict that about 40% of taxi drivers will lose their jobs if they do not get the relief they are demanding.. 

There is no one who is going to win out of this. If we calculate the loss that the taxi industry has incurred as a result of the shutdown, it goes to billions.
Transport minister Fikile Mbalula
Taxi drivers in a heated exchange with the police during Monday's strike.
Revved Taxi drivers in a heated exchange with the police during Monday's strike.
Image: Thapelo Morebudi

Ramaphosa said the economic relief measures the government had introduced to shield businesses from ruin would never be enough.

But he pointed out that the jobs bloodbath was affecting every country that opted for a lockdown to contain the virus.

“As a country, we have all been keenly aware of the consequences of shutting down economic activity during the lockdown that was absolutely critical to save the lives of our people,” wrote Ramaphosa.

“South Africa is not alone. In Italy, the UK, the US, Germany, India, China and nearly every country that had imposed some form of lockdown, jobs have been lost or hours of workers reduced. It is being spoken of as a job-loss tsunami.

“In April the International Labour Organisation forecast there would be about 305 million job losses worldwide. The situation of workers in the informal economy is even worse, with an estimated 1.6 billion workers in danger of losing their livelihoods,” he added.

“For a country such as ours, which was already facing an unemployment crisis and weak economic growth, difficult decisions and difficult days lie ahead.”

For a country such as ours, difficult days lie ahead.
President Cyril Ramaphosa
SA is not alone. All countries that implemented a form of lockdown are seeing major job losses, says President Cyril Ramaphosa.
Bigger picture SA is not alone. All countries that implemented a form of lockdown are seeing major job losses, says President Cyril Ramaphosa.
Image: GCIS

The DA, speaking ahead of finance minister Tito Mboweni’s emergency budget being tabled on Wednesday, said that while the lockdown worsened the country’s economic growth misfortunes, the crisis was a long time coming.  

Those whose livelihoods had been destroyed by the economic impact of the lockdown must lay the blame squarely on an ANC government that has “blood on its hands”..

“South Africans did not stand a chance. The most damning indictment of this government and its predecessors is that the country entered the Covid-19 pandemic vulnerable and with no cover.

“In short, South Africa has lost resilience. Businesses are vulnerable, families are vulnerable, government is vulnerable," said Hill-Lewis.

Commuters are the losers

Taxi commuters expressed concern that the strike had cost them money.

“We have been told to come to work because they said either you come or you don’t get paid,” a commuter at the Phumulong taxi rank in Atteridgeville, Tshwane told Times Select.

“We don’t know what taxi drivers are protesting for. When we use buses they remove us. Why are they disrupting us? We have lost our salaries for today. If they continue tomorrow it means we will be losing more,” she said.

The DA’s demands for Mboweni’s emergency budget speech

• Immediately end the lockdown and replace it with a standard set of evidence-based safety rules and guidelines, where each regulation is directly linked to reducing the spread of Covid-19. This to protect lives and livelihoods;

• Slash the public sector wage bill over the medium term; 

• Sell all state-owned enterprises that are not able to survive without bailouts because the country can no longer afford to be a "blesser" for SAA or "a new nuclear build";

• End Eskom’s monopoly and open the electricity market to competition by allowing municipalities to buy directly from producers;

• Exempt small businesses from agreements reached by bargaining councils; 

• Abandon the National Health Insurance (NHI), prescribed assets and SA Reserve Bank nationalisation because they "scare off" investment, capital and scarce skills;

• Abolish BEE and target redress policies around disadvantage rather than race, in order to make state spending vastly more efficient and strongly in the interest of the poor;

• Auction digital spectrum to bring down data costs for individuals and businesses;

• Review visa regulations to enable more scarce skills to enter SA; and

• Tackle corruption in the private and public sectors by establishing an independent, well-resourced corruption-busting body similar to the Scorpions of the 2000s, which was shut down by the ANC government after the Polokwane conference in 2007.