The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) is expected to hold the rate at the 23-25 March meeting, according to a unanimous vote by 25 panellists on Finder’s SARB repo rate forecast report.

  • Panel of 25 economists unanimously predict the SARB will hold the repo rate 
  • Just over a quarter (28%) expect a rate hike this year
  • 92% say South Africa is at risk of a sovereign debt crisis 
  • Unemployment rate to increase slightly by July 

While the majority (88%) of the panel is in favour of a rate hold, 12% think that the rate should be cut. On average, they say the rate should be cut by around 42 basis points.

 SARBS Repo Rate Hold

IQbusiness chief economist Sifiso Skenjana believes a rate cut will help bring relief to current economic pressure points.

“While we are reporting a better than expected revenue shortfall, the contribution was largely on the back of a mining earnings growth and not a stabilising economic growth context. The declining corporate income tax base is a clear sign of the economic pressure points and relief through an interest rate decrease is needed at this point in time,” he said.

University of Cape Town associate professor Sean Gossel also says the rate should be cut but notes this will result in less capital inflows.

“Unfortunately, SA is reliant on international capital so even though a further reduction in the repo rate would be a welcomed relief and assist SA recover, a decrease will lead to less capital inflows as a result of a tighter interest rate differential.

“There’s no free lunch (or capital flows), so SA will have to absorb the burden of higher interest rates so as to attract capital flows but at the cost of the domestic economy,” he said.

On the other hand, panellists such as Nedbank chief economist Nicola Weimar and Absa Group senior economist Peter Worthington say that the Bank should and will hold the rate because, at the moment, it’s a matter of waiting for previous policies and rate moves to take effect.

“Hiking now would not make sense, since inflation is well contained and the economy is still operating well below potential. Cutting would also not be wise, as the SARB has already done enough, the actual rate is below the neutral rate. So Monetary Policy is stimulatory enough.

“It is now just a case of waiting for the policy to impact on the economy and become a stimulus rather than a cushion against tough times,” said Weimar.

Alexander Forbes chief economist Isaah Mhlanga says the bank should and will hold the rate, despite inflationary pressures, as these trends are likely to be short-lived and that growth is starting to recover.

“At its January 2021 MPC meeting, the SARB kept rates unchanged and said inflation risks appear balanced over the short term and on the upside over the medium term.

“Growth is recovering and global inflationary pressure is rising, which will rule out any potential rate cuts. The economic recovery still remains modest and requires support, especially with fiscal policy that is expected to continue to consolidate in the medium term,” Mhlanga said.

When will the rate first increase?

The MPC will increase the repo rate sometime next year, according to over half (56%) of Finder’s panel. On the other hand, over a quarter (28%) of panellists believe that a rate increase is expected within the year.

SARB Repo Rate Chart 

Both DRM Group RSA economist Christopher Masunda and BNP Paribas chief economist Jeff Schultz, who believe the rate will first increase in the first and second half of 2022 respectively, say the Bank likely won’t consider an increase while CPI inflation stays within its 4.5% bound.

“A SARB that is likely to look through temporary exogenous shocks to CPI (for example, oil prices) and the persistence of a larger negative output gap than what the SARB currently estimates underpins our expectation that the SARB will not have to raise interest rates until H2 2022.

“An earlier-than-expected US Fed tapering (QE reduction), however, does run the risk of placing more pressure on the ZAR and capital outflows to high beta EMs like SA. This could force the SARB to act earlier, though we still maintain that even in this worst-case scenario, the SARB is unlikely to have to raise interest rates at all this year, with CPI inflation in 2021 and 2022 likely to remain below its 4.5% midpoint target by our estimates,” said Schultz.

University of the Free State senior researcher Dr Johan Coetzee also says the rate won’t increase until 2023, but that ultimately, the timings lie in the success of vaccination rollouts.

The success of the vaccination rollout is the major factor that will ultimately inform the interest rate decision going forward. We need to get the economy back at work in full force, and only once this has happened, can we make any informed assessment of what the likely interest rate trajectory will be.

I see the SARB erring on the side of caution for, at the very least, the next 12 to 18 months. We should also remember that the status of our local conditions are also a function of the health of the global economic environment and its ability to bounce back from the pandemic. There are just too many uncertainties that are still at play.

Economists in favour of taxes remaining unchanged

The majority (92%) of Finder’s panel agree with the government’s recent decision for direct taxes to remain unchanged.

SARBS Poll Chart 

EFConsult lead economist Frank Blackmore and Nedbank analyst Reezwana Sumad agree with the government’s decision and say that instead of increasing taxes, the government should look to expand the tax base.

“SARS needs to find a way to begin taxing the informal/cash economy. Including these informal businesses in the formal economy, or conducting more audits of cash-based businesses can unlock some revenue upside,” Reezwana said.

Blackmore furthers this, saying that “taxes need to be reduced for both individuals and corporates, while tax base should be expanded through economic inclusion and business growth so the country can be more internationally competitive.”

Carpe Diem Research Services independent economist Elize Kruger also agrees that taxes should remain unchanged. Instead, the focus should be on improving employment, which in turn will lead to more taxes being paid to SARS.

“The business environment needs to be made attractive, and the ease of doing business (licensing, taxation, red-tape) in SA must improve. Also, the cost of doing business must be reduced, so that private companies can flourish, which will naturally lead to more job opportunities, more taxes to be paid to SARS.”

Mkhabela agrees with Kruger’s stance, saying taxes aren’t key to growing an economy.

South Africa needs to reflect again on these high personal Income Taxes and Corporate Income Taxes. We need to move to a lower attractive tax system for a better economic development and activity, as tax never grew any economy, and we need to attract investors and allow our middle class to invest for the future.

While Peter Worthington also agrees regarding the decision on direct taxes, he believes VAT should be increased.

“South Africa’s VAT rate is very low by international standards. We should lift it and use part of the proceeds to enhance social grants to the poor,” he said.

Unemployment rate to rise, slightly

In the fourth quarter of 2020, South African unemployment rose to 32.5%. By July, the panel anticipates that unemployment will increase, but only slightly, up to 32.8% on average.

Of the 23 panellists who provided a forecast, over half (57%) predict an increase in unemployment, while 30% say it will decrease and the remaining 13% think it’ll stay the same.

Antswisa Transaction Advisory Services CEO and chief economist Miyelani Mkhabela was the least optimistic about South African employment, predicting that a little under 2 in 5 South Africans (38%) will be unemployed come July.

When asked how he thinks employment rates could be improved, he said “South Africa needs Energy security to attract investors in downstream and upstream industrial and strategic investments in the agricultural sector across the country.”

Investec chief economist Annabel Bishop, Frank Blackmore and Jeff Schultz, who all predict that around a third of South Africans will be unemployed by July, say that structural reforms are necessary to curb unemployment.

According to Bishop, the government needs to “rapidly introduce free market structural reforms and reduce the size of the state and the suppressing effect [of] the high regulatory burden (high state control) on the state to increase the ease of doing business.”

Economist at STANLIB Ndivhuho Netshitenzhe meanwhile emphasizes the importance of the COVID-19 vaccine’s role in improving employment rates.

“This will ease the high level of uncertainty in the economy around the constant re-introduction of lockdown measures and give businesses some confidence to start making more permanent investment and hiring decisions.”

However, she said that in the long term, the government needs to focus on reforms that will increase the confidence of both businesses and consumers in economic growth.

“In order to do this, [the] government needs to be less involved in the economy, and instead [the] government should create an environment that encourages businesses to invest, expand and employ, and one that nurtures and promotes entrepreneurship and SME creation,” she said.

Timeline for a budget surplus

The South African economy isn’t expected to reach a budget surplus for around 10 years or more, according to just over half (52%) the panel. Just over a quarter (28%) expect to see budget surplus between 2026-2030, and one in five (20%) expect to see this happen within the next five years.

SARB Surplus Chart 

Economist and lecturer at UNISA, Mzwanele Ntshwanti, who thinks budget surplus won’t be achieved for another 10 years or more, recalled the minister’s words, “we owe too much money to a lot of people,” and added, “we need to achieve some level of stability and self sufficiency.”

Elize Kruger says the debt burden will continue to rise if South Africa continues on the current trajectory.

“If the country needs to borrow money to fund non-interest expenditure (as is currently the case, i.e. the country runs a primary deficit), the debt burden will just continue to rise and an ever bigger portion of tax revenue will be eaten up by interest payments.”

Several panellists, including Annabel Bishop and Nicola Weimar noted that a budget surplus isn’t as important as a primary surplus (i.e. the budget balance less interest rates).

“I don’t think they necessarily need to run a budget surplus. They should aim for a primary surplus to slow the rate of debt accumulation. However, if they can run a consolidated deficit of around 3% of GDP, it would probably be more appropriate for a developing country like SA, with high unemployment, high inequality and poor growth prospects,” Weimar said.

Professor of economics at the University of the Western Cape Matthew Kofi Ocran noted that deficits aren’t bad per se, and it’s more a question of sustainability.

Sean Gossel shared a similar sentiment, noting that it’s important to demonstrate debt management.

“Because of SA’s downgrades, it’s more important to show consistent debt management than a (likely) temporary budget surplus.”

Professor at the North-West University School of Economics Waldo Krugell highlighted that a primary surplus is the only way to avoid a future debt crisis.

Is South Africa on the verge of a sovereign debt crisis?

South Africa is at some level of risk of a sovereign debt crisis, according to the overwhelming majority of panellists (92%).

SARB Sovereign Debt Crises 

Over a third (36%) say the risk is high and 40% say the risk is moderate, while 16% say there’s only a slight risk of this happening. Just 8% (2 panellists) say South Africa is not at risk of a sovereign debt crisis.

Mzwanele Ntshwanti says the crisis is already here.

“In the last 10 years, the debt has exponentially increased from around 23% to around 80%. This is a crisis.”

Miyelani Mkhabela agrees that there’s a high risk, noting that the situation will only worsen as the COVID-19 pandemic continues.

“By the end of 2021/22, gross loan debt is expected to be at a range of 84% and 90% of GDP, which is highly riskier as the COVID-19 crisis continues, and in the future, we forecast environmental consequences. The situation is bad for a developing economy.”

Stellenbosch University COO Stan du Plessis noted that with an interest burden of almost 5% of GDP, South Africa is well within the likely zone of a fiscal crisis.

“The sovereign rating already reflects the precarious state of the government’s finances. When the bond market wakes up to this situation, the asset markets can accelerate the fiscal crisis rapidly,” he said.

However, Nicola Weimar says the risk is moderate given the bulk of South African debt is rand-denominated.

“Ultimately, the debt burden is unsustainable. If foreign lenders lose interest, SA will have to fund the deficit through access to IMF, World Bank or more destructive means. The risk is, however, reduced by the fact that the bulk of SA sovereign debt is rand-denominated,” she said.

Meanwhile, chief economist at Efficient Group Dawie Roodt says there’s no risk given that South Africa will likely deflate most of the ZAR debt away, highlighting that there are sufficient reserves to cover non-ZAR debt.

Will mortgage approvals continue at this volume?

The trend of a high volume of mortgage approvals we saw in 2020 will likely come to an end this year, according to just under half the panel (45%). However, over a third of the panel (36%) say the trend will continue, and 18% say they’re not sure.

 

Peter Worthington, who doesn’t think the trend will continue, says the volume we saw last year can be attributed to a stock adjustment.

“The problem is that incomes are not there to keep this going on a long term basis,” he added.

Reezwana Sumad agrees mortgage approvals won’t continue in the same volume and noted 2020 set a high base.

“[It] will be difficult to meet or beat this volume because we do not expect interest rates to decline in 2021 as they did in 2020. The sharp reduction in the repo rate resulted in an increased demand for mortgages as opposed to rentals,” she said.

Ndivhuho Netshitenzhe thinks the trend will reverse as interest rates have likely bottomed out.

“[It’s] most likely that people were taking full advantage of the historic low interest rates and this trend should start to reverse as interest rates are likely to have bottomed out,” she said.

However, on the flip side, many of those who expect to see the trend continue say the low interest rate regime and changing lifestyles due to COVID-19 will continue to bolster the sector.

Property price forecasts

Property prices in South Africa’s 10 biggest cities are set to increase by an average of 2.2% over the next 6 months, according to 14 of the panellists who provided property forecasts.

 

Several economists noted that the current low interest rates will prop up the market.

Matthew Kofi Ocran put it simply: “The continued low-interest-rate regime will provide an incentive to increased market activity.”

Professor at the University of Johannesburg Ilse Botha, who gave property forecasts ranging from 2-3% across all cities, noted that the lower interest rate environment means that owning property is more affordable than renting.

However, global head of operational risk at Fitch Solutions Chiedza Madzima says that while the low interest will support the sector, prices will remain subdued when accounting for inflation.

“A low interest rate environment will support the sector, and prices will likely move slightly higher in nominal terms (year on year). However, in real terms, housing prices will remain subdued when accounting for inflation. Larger cities/areas will see higher demand compared to smaller/high density areas. In lower income brackets, the recovery will be slower,” she said.

On average, Cape Town is expected to increase the most (4.5%), followed by Johannesburg, (3.07%) and Durban (2.79%). Meanwhile, cities like East London (0.64%) and Port Elizabeth (0.93%) are expected to increase only marginally by less than 1%.

Dr Johan Coetzee, who provided the highest price increase forecast for Cape Town at 15%, says the Western Cape will be seen as an investment opportunity as the economy starts to pick up.

Frank Blackmore expects to see moderate growth inland while coastal cities could see a reduction in prices.

He forecasts cities like Port Elizabeth and Pietermaritzburg will see slight drops of 3% and 2% respectively, while cities like Johannusburg and Durban will increase by 3% or 4%.

Mzwanele Ntshwanti says any increases will be marginal due to the ongoing economic consequences of COVID-19.

“The market is generally struggling due to COVID-19 and loss of income for many people. Inequality is showing itself greatly as well in this industry since high earners are the winners and low earners are the losers. Thus, increases will be marginal.”

Seif Bamporiki, coordinator of Rwanda National Congress, a Rwandan opposition group in exile, was shot dead in Nyanga, Cape Town on Sunday, said South African police.

Western Cape police said on Monday that an investigation into the shooting is still underway. “The circumstances surrounding a murder are being investigated by Gugulethu police following an incident in Europa squatter camp where an adult male was shot and killed,” Police Colonel Andre Traut said.

“The deceased was pulled from his vehicle and shot, while the 50-year-old male who accompanied him managed to escape unharmed,” he said.

The Rwanda National Congress was established in the United States on Dec. 12, 2010. It was not clear if the killing was politically motivated.

 

XINHUA

To fast track the response to the COVID-19 pandemic, a broad range of candidate COVID-19 vaccines are being investigated. The results of clinical trials being run on some of them have started to be released.

The Novavax vaccine trial is one of them. Phase 3 trial results from the UK and phase 2b results from South Africa were recently announced. Shabir Madhi was the lead researcher in the South African leg of the trial. The Conversation Africa’s Ina Skosana asked him to provide context.


What are your main findings?

Novavax vaccine trials run in South Africa and the UK indicate that its efficacy in the UK was 89% at least seven days after individuals had received two doses of vaccine.

In South Africa, the vaccine efficacy was 60% in people living without HIV. A small group of individuals living with HIV – about 150 – was included in the efficacy analysis. However, the study didn’t have the statistical power to evaluate for vaccine efficacy specifically in this population.

Why the major difference in risk between the UK’s 89% and South Africa’s 60%?

We’ve got two different studies that have evaluated the same vaccine. But they’ve evaluated them under very different conditions.

Firstly, conditions in South Africa and the UK are different in terms of the socio-economic environment, which could influence the force of infection by SARS-CoV-2.

Over and above that, the trials evaluated vaccine efficacy against two very different variants, which would differ in their susceptibility to antibodies induced by vaccination (as well as by natural infection from past infection by prototype SARS-CoV-2).

The South African efficacy readout is against the B.1.351 variant – 92% of all of the cases in the main analysis developed COVID-19 following infection by this variant.

The UK trial involved people infected with the B.1.1.7 and other variants.

The variants originating in the UK and the one in South Africa share a common mutation (N501Y) that has been associated with increased transmissibility of the virus. However, the variant found in South Africa has an additional three or four mutations involving immunodominant components of the spike protein that could interfere with the vaccine induced neutralising activity of the virus.

How is the Novavax vaccine different from others that have reported data on their efficacy?

Firstly, it’s a different vaccine based on a more novel technology. It’s a protein based vaccine. It involves the spike protein of the virus itself, which is produced and formulated as a nanoparticle type structure. Once injected, it stimulates the immune system to start producing antibody and also induces T-cell immune responses.

This is different to messenger RNA based vaccines. These aren’t delivering the actual protein, but delivering the blueprint coding for the spike protein.

It’s important to understand that it wouldn’t be scientifically robust to do any head-to-head comparisons between the study that was done in South Africa and studies for the messenger RNA vaccines, as well as the AstraZeneca vaccine, where there was a pooled analysis of data from the UK as well as in Brazil. The same thing goes for the Sputnik V vaccine.

Pasha 95: Key questions answered on the results of the Novavax vaccine trials. The Conversation Africa - Pasha, CC BY-NC-ND17.6 MB (download)

Efficacy of 95% was reported for the two messenger RNA based vaccines from Moderna and Pfizer. For the AstraZeneca vaccine, an average of about 70% efficacy in the pooled analysis from the UK and Brazil was reported. For the Sputnik V vaccine, it was around 85%.

Notably, however, none of these studies were done in settings similar to South Africa. And most importantly, the vaccine efficacy in those studies was evaluated against the prototype virus, which did not have the mutations evident in the B.1.351 variant against which the vaccine efficacy of the Novavax study was evaluated in South Africa.

What makes the Novavax vaccine stand out?

It’s the first vaccine that provides objective scientific evidence that it can protect people against the B.1.351 variant circulating in South Africa. This is true even though the vaccine efficacy is only 60% against all severe COVID-19 illness, with the majority of cases being mild to moderate.

The 60% efficacy reported for the Novavax vaccine needs to be benchmarked against the World Health Organisation and other regulatory authorities criteria, that any COVID-19 vaccine with at least 50% efficacy and which protects for at least six months would be considered to be useful from a public health perspective.

Unfortunately, the vaccine is only likely to become available in April or May. The government needs to engage with the relevant stakeholders to secure supplies earlier given the threat of the new variant.

Why was it important for South Africa to participate in this trial?

I believe the data we’ve released speaks to why it was important to be active in getting vaccine studies done in South Africa. Without them we would simply be clueless whether vaccines work in South Africa.

The first reason is that we’ve got different populations as well as different social and economic conditions. It was important to be able to evaluate vaccines within a context of high density of population and overcrowding. The types of infections that take place under those scenarios are very different from those taking place in high-income countries.

And then there are the health factors and differences in terms of prevalence of comorbidities. These include HIV, obesity and hypertension.

All these types of factors could influence the efficacy readout of the vaccines.

It took a lot of convincing both for Novavax as well as for AstraZeneca vaccine for their sponsors to eventually agree to bring studies to South Africa. And the studies were largely led directly by us in South Africa. We also had to convince funders to support the studies in South Africa. The Novavax study, for example, is co-funded by the Bill and Melinda Gates Foundation and Novavax. The AstraZeneca vaccine study is sponsored by the University of Oxford, but funded by the South African Medical Research Council and the Bill & Melinda Gates Foundation.

This is just to emphasise that companies were not rushing to Africa to get their COVID-19 vaccines evaluated on the continent. On the contrary, there seems to be little incentive for them to do their studies here, as it’s not seen as a market that will provide a return on their investments. Unless we are proactive in ensuring that studies are done in Africa, we will continue lagging behind in knowledge on how vaccines work in our own context. We are being compromised by not having more clinical trials done in Africa, especially for diseases which disproportionately affect Africans.

Has South Africa secured access to the vaccine because of its involvement in a trial?

The involvement in a clinical trial and the ability of a country to procure vaccines are completely different processes. The role players involved in these processes differ within a company as well as within a country.

As an investigator, my responsibility is to provide the scientific evidence as to whether the vaccine works or not. It would be a conflict of interest if, as an investigator, I started engaging with companies, even before the vaccine trials are done, to make a case, or at least to negotiate on behalf of the country, that South Africa should get vaccine if the vaccine studies are shown to be working.

This would be construed as an undue incentive on my part, and could lend itself to the potential for manipulating study results to come up with a favourable answer.

The data that’s been forthcoming from South Africa certainly should put it in a favourable position to engage with Novavax. But that type of engagement should have started when the vaccine trial started, rather than after the results were released.

I’m uncertain whether the South African government has as yet engaged with Novavax, which is a small biotech company in the US. However, Novavax has partnered with the Serum Institute of India to produce the Novavax vaccine. It would be important for the government to engage with the Serum Institute of India on accessing this effective vaccine.The Conversation

 

Shabir A. Madhi, Professor of Vaccinology and Director of the SAMRC Vaccines and Infectious Diseases Analytical Research Unit, University of the Witwatersrand

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The ongoing COVID-19 pandemic, and the policy measures to combat it, are having profound effects on the economic and social lives of citizens. They are threatening employment as well as the long-term livelihoods and well-being of millions around the world.

South Africa has not been exempted from the socio-economic effects of the pandemic. Its economy has been in decline since it entered a stringent lockdown as the main public health response to curb the spread of the virus in March 2020. This is reflected in its latest available statistics for both gross domestic product (GDP) and employment.

The country’s economy wasn’t in great shape even before the lockdown. It was hit hard by the global financial crisis in 2008, recording average growth just above 2% between 2008 and 2012. And now the National Treasury has forecast that the economy will contract by 7.8% in 2020 due to COVID-19 measures.

The unemployment rate in South Africa has been persistently high over time, hovering above 20% over the last decade. The official unemployment rate reached an all-time high of 30.8% during the third quarter of 2020.

Understanding the effects of the global pandemic on employment – at aggregated and sectoral levels – is therefore key for governments, policymakers, workers and employers. This should help minimise the long-term effects of the pandemic while ensuring the safety of individuals and the sustainability of businesses and jobs.

This article focuses on providing results from applied economic analysis on the sectoral winners and losers during the pandemic. We also identify the people who have been affected the most and evaluate the South African government’s policy response to minimise its effects.

So far the government’s response to address the impact of the pandemic has consisted of two main interventions: a stimulus package launched in April 2020 and in October 2020 a more long-term recovery plan. Our article focuses on the short-term stimulus package.

Simulation exercise

Given that data on sectoral GDP, aggregate GDP and poverty lag the employment figures, results from economic modelling such as the one we set out here can help provide some useful information in the meantime.

This article presents the results of our COVID-19 policy response simulations. The models trace a variety of channels through which the pandemic affected the economy.

The simulation exercise showed that the sectors and workers that were most affected by the COVID-19 pandemic were the mining/mineral sectors, the construction sector, the transport sector and most of the services sectors such as retail trade and accommodation.

But the spillover effects meant that in the end all sectors were affected. Reduced economic activities led to reduced labour and capital demand. This, in turn, led to reduced income to all agents in the economy. Households were not spared. In particular, households dependent on unskilled labour income suffered the most because these workers were the most constrained after the lockdown.

Mining and minerals were affected by the lockdown as well as the drop in the mineral prices on the world market. Based on the model results, we estimated that 864,000 were affected in a mild scenario of the COVID-19 crisis. In a severe expression of the crisis we estimate 1.3 million jobs being affected. This is in line with the results from the Quarterly Employment Statistics by Statistics South Africa. This showed losses in full-time employment of over 568,000 (-6,2%) year-on-year between June 2019 and June 2020 (at the peak of the COVID-19 lockdown) and losses of over 525,000 (-5.7%) in full-time employment year-on-year between September 2019 and September 2020.

Major impact

Overall, the effects of the simulated COVID-19 pandemic were quite harsh on both the production and demand sides of the economy. The decline in GDP growth (-10%) has been largely due to the marked slowdown in economic activity coupled with widespread disruptions in both international and domestic supply chains.

Lower GDP growth and increasing unemployment invariably translate to rising unemployment and poverty rates. When extending the analysis to poverty, the modelling results show some modest increase in poverty, increasing by 2.5 percentage points.

In addition, females, particularly the poorest female-headed households, were more negatively affected. This is because they derive a larger share of their income from a lower-skilled type of work.

As the country attempts to gain control over the pandemic, our findings point to the importance of interventions in at least three areas: protecting vulnerable populations, supporting vulnerable sectors and external trade diversification.

It is important to note that, given the paucity of information on the ongoing pandemic, results of this and any modelling exercises will be shrouded by uncertainty. Hence the directions and intensity of changes must be emphasised.

Implications for policy

The most interesting aspect of our findings from a policy intervention point of view is that the decline in employment and poverty is not uniform across skill levels and gender. As is often the case during economic crises, there are winners and losers, and in this case, it is the least skilled workers and poor females who suffer the most.

This suggest that when putting together a building back strategy government should promote investments in the services sectors, help these different sectors to set up protective barriers to allow the different activities to restart and importantly recover some of the lost jobs.

A support package to increase consumers’ purchasing power, and reducing the operating costs of these businesses and industries, would also be effective interventions.

As the country intervenes to cushion the poor, measures to resuscitate economic growth must be put in place at the same time. Policy options could include increasing public investments, accelerating the implementation of existing policies and diversifying the export and import basket. This could include increasing high value added commodities in total exports and increasing the share of primary products in total imports.The Conversation

 

Jessika Bohlmann, PhD (Economics), University of Pretoria; Helene Maisonnave, Professor of Economics, Université Le Havre Normandie; Margaret Chitiga-Mabugu, Director and Head, School of Public Management and Administration, University of Pretoria; Martin Henseler, Researcher, EDEHN - Equipe d'Economie Le Havre Normandie, Université Le Havre Normandie, and Ramos Emmanuel Mabugu, Professor, Sol Plaatje University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Finder’s repo rate panel expects the South Africa Reserve Bank (SARB) to hold the repo rate this week but over a third (36%) think the Bank should cut the rate.

BER chief economist, Hugo Pienaar, is the only panellist out of 15 forecasting a rate cut. He thinks the Bank will decrease the rate by 25bps, but is in favour of a deeper 50bps cut.

  • 93% of economists say the SARB will hold the repo rate but over a third (36%) think the Bank should cut the rate
  • Nearly three quarters (73%) don’t think the rate will increase in 2021
  • 50% think the SARB will be forced to buy more bonds 

“With a benign inflation outlook, monetary policy has space to provide some moderate further stimulus to the economy at a time when fiscal policy is heavily constrained to do so,” he said. 

Independent economist, Elize Kruger, is one economist who expects the Bank to hold, but is in favour of a 25bps rate cut.

“The SA economy is still bleeding amid the economic impact of the Covid-19 crisis, while consumer inflation remains well under control in the medium term forecast, thus a small window of opportunity has opened for further stimulation,” she said.

STANLIB economist, Ndivhuho Netshitenzhe, also called for a 25bps decrease, noting inflation remains under-control.

That, along with the weak domestic economic environment that is expected to continue at least into early 2021 (as a result of increased lockdown measures), gives the SARB some room to be more expansionary in its monetary policy. 

“Despite this, however, the SARB is aware that although SA consumer inflation is still expected to remain comfortably below the midpoint of the inflation target over the next 6 months, base effects could push SA inflation somewhat higher in 2021, especially during the middle of 2021”.

However the majority of the panel (64%), including Economist at RMB, Mpho Molopyane, think the Bank should and will hold the rate.

“The growth and inflation outlook has not significantly changed since the November 2019 meeting to warrant a change [to] interest rates. GDP is going to take a while to return to pre-covid levels, with inflationary pressures relatively contained. This will enable the SARB to keep monetary policy accommodative and the repo rate unchanged in contrast to the tightening bias projected by the QPM at the November 2019 MPC meeting,” she said.

Nearly three quarters (73%) of the panel don’t think the rate will increase this year. 47% say a hike will occur in the first half of 2022, 20% are forecasting an increase in the second half of 2022 and 7% in 2023.

IQbusiness chief economist, Sifiso Skenjana, is one panellist who thinks the rate will increase in the first half of next year due to inflation.

“We are seeing early signs of tapering off on monetary easing / accommodative policy in some of the developed economies which may suggest that we may see higher levels of inflation in those economies by year end 2021.” 

Do you think the SARB will be forced to buy more bonds?

The panel is equally divided on whether the SARB will be forced to buy more bonds (50%-50%). 

SARBs

BNP Paribas chief economist, Jeff Schultz, thinks the Bank will be forced to buy more bonds in the short term, commenting it is only likely to do so in response to further deterioration in economic conditions or market dislocations.

The SARB is likely to keep as much powder dry as possible and assess the outlook for the economy and bond market first before making any preemptive purchases. Right now the bond market continues to function well, having recovered from the massive sell off seen in March/April last year. This should limit the SARB’s willingness to aggressively re-enter its SAGB buying right now,” he said.

22% of the panel think the Bank will be forced to buy more bonds in the short term, 14% in the medium term, 7% long term and 7% permanently.

Alexander Forbes chief economist, Isaah Mhlanga, thinks the Bank will need to buy bonds over the long term, noting that bond buying programs will become mainstream in emerging markets.

“Bond buying programs were unconventional monetary policy tools in the advanced world a decade ago and they are now mainstream tools and no longer unconventional. Bond buying programs are still unconventional in emerging markets like South Africa, however, over time, they will likely be mainstream tools along the path followed by advanced economies.”

South African President Cyril Ramaphosa reimposed a ban on alcohol sales and ordered the closure of all bars Monday as part of new restrictions to help the country battle a resurgence of the coronavirus, including a new variant.

Ramaphosa also announced the closure of all beaches and public swimming pools in the country’s infection hotspots, which include Cape Town, Johannesburg, Durban and several coastal areas. In addition, South Africa is extending its nighttime curfew by four hours, requiring all residents must be at home from 9 p.m. until 6 a.m., the president said.

“Reckless behavior due to alcohol intoxication has contributed to increased transmission. Alcohol-related accidents and violence are putting pressure on our hospital emergency units,” Ramaphosa said in a nationwide address.

“As we had to in the early days of the lockdown, we now have to flatten the curve to protect the capacity of our healthcare system to enable it to respond effectively to this new wave of infections,” he said.

Ramaphosa said the ban on selling alcohol and other new restrictions would take effect at midnight. They include the mandatory wearing of masks in public, and anyone found not wearing a mask in a public place will be subject to a fine or a criminal charge punishable by a possible jail sentence, the president said.

Ramaphosa said the increased restrictions are necessary because of a surge in COVID-19 infections which has pushed South Africa’s total confirmed virus cases past 1 million.

“Nearly 27,000 South Africans are known to have died from COVID-19. The number of new coronavirus infections is climbing at an unprecedented rate,” he said. “More than 50,000 new cases have been reported since Christmas Eve.”

Ramaphosa announced the new measures after a Cabinet meeting and an emergency meeting of the National Coronavirus Command Council. He said the new restrictions would be reviewed in a few weeks and a relaxation would only be considered when the numbers of new cases and hospitalizations decrease.

The country surpassed the 1 million mark in confirmed virus cases on Sunday night, when authorities reported that the country’s total cases during the pandemic had reached 1,004,413, including 26,735 deaths.

Like Britain, South Africa is battling a variant of COVID-19 that medical experts think is more infectious than the original. The variant has become dominant in many parts of the country, according to experts.

The South African Medical Association, which represents nurses and other health workers as well as doctors, warned Monday that the health system was on the verge of being overwhelmed by the combination of higher numbers of COVID-19 patients and people needing urgent care from alcohol-related incidents. Many holiday gatherings involve high levels of alcohol consumption, which in turn often lead to increased trauma cases.

“To alleviate the pressure on the system during this time of the year, where we only have skeleton staff working, especially in the public sector, as well as in the private sector, we are asking for stricter restrictions regarding social gatherings,” Angelique Coetzee, chairwoman of the medical association told The Associated Press.

“South Africa has got a history of very high alcohol abuse and binge drinking, especially over the weekends. In certain areas that leads to a lot of trauma cases, assaults, motor vehicle accidents and domestic violence,” she said.

The medical association has called on the government to impose stricter restrictions on the sale of alcohol, especially where large gatherings are concerned.

When South Africa previously had a total ban on liquor sales, trauma cases in hospitals dropped by as much as 60%, according to government statistics. When the ban on alcohol sales was lifted, trauma cases went back up to previous levels.

Amid a resurgence of COVID-19 in early December, South Africa limited sales of alcohol to Monday through Thursday between the hours of 10 a.m. to 6 p.m. The country also has a nightly 11 p.m.-4 a.m. curfew.

Various alcohol traders had pleaded with the government to avoid a total ban on alcohol sales, citing the economic damage it would cause. South Africa’s alcohol industry was among those hardest hit when the country imposed a hard lockdown during April and May that also banned all liquor sales.

South Africa’s 7-day rolling average of confirmed daily cases has risen over the past two weeks from 11.18 new cases per 100,000 people on Dec. 13 to 19.87 new cases per 100,000 people on Dec. 27.

The 7-day rolling average of daily deaths in the country has risen over the past two weeks from 0.26 deaths per 100,000 people on Dec. 13 to 0.49 deaths per 100,000 people on Dec. 27.

Ramaphosa urged people to avoid gatherings for New Year’s Eve. Instead, he asked all South Africans to light candles.

“I will light a candle in Cape Town at exactly midnight on New Year’s Eve in memory of those who have lost their lives and in tribute to those who are on the frontline working to save our lives and protect us from harm,” he said. “I ask that you join me wherever you are in this very important symbolic gesture.”

 

Credit: Associated Press

The Covid-19 crisis has shown the business world that it is possible to completely overhaul the way we do things in a matter of weeks or even days, says Khomotso Molabe, chief information officer at Standard Bank South Africa.

When the severity of the pandemic became more evident and South Africa announced a national lockdown in March – the president gave the nation a few days to prepare itself – our immediate priority was to ensure the safety and wellbeing of employees and customers.

This was a time for us to focus intensely on our purpose – driving Africa’s growth while uplifting and protecting her people. As we prepared for the new world we were about to enter, we held daily meetings with the group’s top executives to chart the way forward.

First and foremost, we had to ensure that we looked after our clients as a designated essential services provider. Finding ways to assist them became a top priority. We also immediately implemented measures to get as many Standard Bankers as possible to work from home, and to ensure that they had the resources needed to do so effectively.

As part of our preparations, we put measures in place to allow employees to report Covid-19 infections – both affecting themselves and their contacts – so that we could track the spread of the virus and contribute to containment efforts. And we launched a dedicated Covid-19 app and portal to keep our people informed.

As we scaled up our remote work capacity, office-based employees were the first to shift to working from home, followed by call-centre staff and then branch employees who do not interact directly with customers.

We also identified those customer-facing branch employees who are at increased risk of severe illness from Covid-19. To limit their exposure to the virus, they were granted permission to work from home or take special leave. For staff on the frontline, we provided access to personal protective equipment and sanitiser to keep them safe, among numerous other measures.

New ways of working

Within a short space of time, more than 75% of our staff were working from home – and this remains the status quo well into the second half of 2020.

Given the critical role that our IT teams were playing in enabling the shift to remote work, we froze any changes to our technology systems and made sure that funding was made available for timeous and expedited investments in systems and partnerships.

We had to scale up our remote work capacity by providing employees with remote access technologies, laptops and connectivity devices.

For one of Africa’s largest corporates, getting this right in a matter of days is no mean feat. Prior to the pandemic, we had provided around 6,000 data devices to employees. Now, about 23,000 employees have them.

And given the need for teams to remain connected, we also needed to expand our access to collaboration tools such as Microsoft Teams and BlueJeans.

Before the crisis, we held roughly 30 BlueJeans meetings a month, versus 900 nowadays. And employees now hold about 500,000 Microsoft Teams meetings a month, compared to just 20 000 before.

In fact, we have become so well versed in digital meetings that we have even hosted large-scale investor conferences online via our partnership with Microsoft, including the Africa Investors’ Conference. Encouragingly, participation was better than in previous years, when the event was held in person.

We have conducted the Standard Bank Group Annual General Meeting (AGM), all board and Executive Committee meetings online, and even hosted South Africa’s finance minister, Tito Mboweni, on a virtual panel discussion with our clients and employees.

Looking forward

Meanwhile, the bank recognised that while working from home brought certain benefits to employees – for instance, spending more time with family and less time commuting – it is not without its challenges.

Many households are not equipped for extended periods of remote work. So, where possible, we provided employees with decent office chairs and desks to make the shift easier and their workdays more comfortable.

Since we now know that working from home on a large scale is not only possible but can even enhance productivity and employee satisfaction, we are preparing for the possibility of a permanent shift in the way that we work – this could entail a combination of working from home and from the office.

However, we are cognisant of the fact that remote work is not suited to all households. Some employees might not have an environment that is conducive to it. For this reason, we will ensure that we remain sensitive to individual employee preferences and needs as we map the way forward.

Overall, the shift to digital ways of working and collaborating has been a huge success. Standard Bank has accelerated its digitisation and client-centricity drive, and we have reimagined the workplace. Like other industries, the banking sector may well have advanced five years in its digitisation journey in the space of just a few months.

Reports from Britain and South Africa of new coronavirus strains that seem to spread more easily are causing alarm, but virus experts say it’s unclear if that’s the case or whether they pose any concern for vaccines or cause more severe disease.

Viruses naturally evolve as they move through the population, some more than others. It’s one reason we need a fresh flu shot each year.

New variants, or strains, of the virus that causes COVID-19 have been seen almost since it was first detected in China nearly a year ago.

On Saturday, Prime Minister Boris Johnson announced new restrictions because of the new strain, and several European Union countries banned or limited some flights from the U.K. to try to limit any spread.

Here’s what is known about the situation.

WHAT’S CONCERNING ABOUT THE RECENT STRAIN FOUND IN ENGLAND?

Health experts in the U.K. and U.S. said the strain seems to infect more easily than others, but there is no evidence yet it is more deadly.

Patrick Vallance, the British government’s chief scientific adviser, said that the strain “moves fast and is becoming the dominant variant,” causing over 60% of infections in London by December.

The strain is also concerning because it has so many mutations — nearly two dozen — and some are on the spiky protein that the virus uses to attach to and infect cells. That spike is what current vaccines target.

“I’m worried about this, for sure,” but it’s too soon to know how important it ultimately will prove to be, said Dr. Ravi Gupta, who studies viruses at the University of Cambridge in England. He and other researchers posted a report of it on a website scientists use to quickly share developments, but the paper has not been formally reviewed or published in a journal.

HOW DO THESE NEW STRAINS OCCUR?

Viruses often acquire small changes of a letter or two in their genetic alphabet just through normal evolution. A slightly modified strain can become the most common one in a country or region just because that’s the strain that first took hold there or because “super spreader” events helped it become entrenched.

A bigger worry is when a virus mutates by changing the proteins on its surface to help it escape from drugs or the immune system.

“Emerging evidence” suggests that may be starting to happen with the new coronavirus, Trevor Bedford, a biologist and genetics expert at the Fred Hutchinson Cancer Research Center in Seattle, wrote on Twitter. “We’ve now seen the emergence and spread of several variants” that suggest this, and some show resistance to antibody treatments, he noted.

WHAT OTHER STRAINS HAVE EMERGED?

In April, researchers in Sweden found a virus with two genetic changes that seemed to make it roughly two times more infectious, Gupta said. About 6,000 cases worldwide have been reported, mostly in Denmark and England, he said.

Several variations of that strain now have turned up. Some were reported in people who got them from mink farms in Denmark. A new South African strain has the two changes seen before, plus some others.

The one in the U.K. has the two changes and more, including eight to the spike protein, Gupta said. It’s called a “variant under investigation” because its significance is not yet known.

The strain was identified in southeastern England in September and has been circulating in the area ever since, a World Health Organization official told the BBC on Sunday.

WILL PEOPLE WHO HAD COVID-19 FROM AN OLD STRAIN BE ABLE TO GET THE NEW ONE? WILL IT UNDERMINE VACCINES?

Probably not, former U.S. Food and Drug Commissioner Scott Gottlieb said Sunday on CBS’s “Face the Nation.”

“Unlikely,” Gupta agreed.

President-elect Joe Biden’s surgeon general nominee, Vivek Murthy, said Sunday on NBC’s “Meet the Press” that there’s “no reason to believe that the vaccines that have been developed will not be effective against this virus as well.”

Vaccines produce wide-ranging responses by the immune system beyond just those to the spike protein, several experts noted.

The possibility that new strains will be resistant to existing vaccines are low, but not “inexistent,” Dr. Moncef Slaoui, the chief science adviser for the U.S. government’s vaccine distribution effort, said Sunday on CNN’s “State of the Union.”

“Up to now, I don’t think there has been a single variant that would be resistant,” he said. “This particular variant in the U.K., I think, is very unlikely to have escaped the vaccine immunity.”

Bedford agreed.

“I’m not concerned” because a lot of changes in the genetic code would probably be needed to undermine a vaccine, not just one or two mutations, Bedford wrote on Twitter. But vaccines may need fine-tuned over time as changes accumulate, and changes should be more closely monitored, he wrote.

Murthy said the new strain doesn’t change the public health advice to wear masks, wash hands and maintain social distance.

 

Credit: Associated Press

 

It has been a year of reckoning: a year that lit a fire beneath online payments in South Africa, transforming eCommerce while creating immense economic pressure.

As the global pandemic waged war on government process, merchant sales and consumer behaviour, companies were faced with tough decisions and mercurial markets that reshaped how they worked, innovated and delivered services. It was tough and it was brutal, but it was also a year that has taught the retail sector essential lessons in online engagement and created opportunity amid the complexity of a pandemic.

eCommerce diamonds made under pandemic pressure 

South Africa underwent one of the world’s most rigorous lockdowns. Essential goods were the only eCommerce items allowed to go on sale, and many companies were put at risk of closure. Some survived, many did not. At this time, the eCommerce Forum South Africa (EFSA) worked with the government to effectively and safely reduce the restrictions on commerce to help ignite the flailing economy and establish a fresh baseline for growth in a pandemic-powered world. 

This saw significant innovation and shifts in approach and perspective, particularly in the eCommerce arena. Retailers adapted quickly, with Checkers Sixty60 and Zulzi changing the way that groceries were bought, while Uber shifted people’s experience of public transport and the delivery of food and other essential products. 

For those retailers that were unable to keep up with the demand, collaboration became the word of the year. Pick ‘n Pay, for example, partnered with Bottles to introduce same-day delivery services to its customers – a relationship that was so successful that it saw the retail giant buying the delivery service - while OneCart partnered with Exclusive Books and HP to achieve the same levels of delivery efficiency.

Move to mobile payments gains momentum

Along with the rise of app-based and online shopping experiences, there was significant growth in mobile transactions, with tap and go becoming increasingly relevant to safety-conscious South Africans looking for seamless cashless payment solutions that are trustworthy and easy to use. 

PayU saw an impressive move to mobile payments with up to 85% of transactions completed on a mobile device in 2020, compared to 50% in 2019. This rapid increase in mobile payment usage correlates to the massive increase in smartphone penetration in South Africa, with the Independent Communications Authority of South Africa (ICASA) reporting in the 2020 State of the ICT Sector report that smartphone penetration has risen by 9.5% over the past year. 

In addition to increased usage of mobile devices and payments, there has been a shift in how customers approach mobile payment platforms. They want tools that engender trust, that minimise the risk of fraud and theft, and that allow them to do more than just pay for online shopping. 

This change in consumer attitude is also changing access to financial services and solutions. From the micro enterprise to the corporate building foundations in a rural community, digital payment solutions offer people access to banking services and cash management tools that previously would have been out of their reach. The more people gain access to digital financial tools that are secure and affordable, the more they are empowered to grow, reach new markets, and improve their financial acumen. Digital payments are tearing down the barriers to financial inclusion and giving SMEs and communities improved opportunities for growth.  

Cashless payments come into their own

Of course, in addition to the ongoing pandemic, there are challenges that must be overcome to ensure growth. Merchants need more opportunity to expand online, buoyedby improved access to education and support. With the right information and understanding, they could flourish online if they have access to the right assistance and guidance from the outset.

Pay U 

For consumers, fraud and security remain a high concern and priority. To drive growth in the eCommerce sector, merchants need to invest into payment platforms that showcase their investment into tools such as 3D secure and that put security at the forefront of development.

As the country moves towards 2021 and the ongoing limitations presented by the virus and related restrictions, there are also opportunities among the challenges. The first is to find ways of capitalising on the new African Free Trade Area agreement scheduled to come into effect on 01 January 2021. The agreement allows for impressive business reach into new markets and, as Africa is a significant market for remittances, this is a chance for merchants to expand their ecommerce footprint into cross-border trade with the right infrastructure, regulations and payments in place. 

Another development that has seen growth in 2020 and will continue its trajectory in 2021 is QR payments. These have become far more ubiquitous over the past year with many companies investing into QR-powered mobile solutions thatmake payments simple, quick and accessible. From Samsung to Apple to Snapscan, the scale and use case for QR codes will continue to evolve. It’s a digitally-driven solution that capitalises on consumers’ need to shop fast and pay even faster, while presenting new ways of selling goods and services across multiple platforms. QR codes are being used by leading payment platforms to expand South African access to alternative payment solutions that suit their needs, lifestyles and business models.

Finally, one of the biggest and most essential changes we need to see in 2021 is reductions in the cost of data and access to affordable connectivity. Already, significant strides have been made in this arena, but data and internet access costs need to fall even further to reduce the barrier to entry, improve eCommerce growth, boost mobile usage, and increase access to inclusive financial services. This will drive growth and economic stability while further allowing for the market to cement its digital foundations and translate the complexities of the pandemic into long-term opportunities. 

From digital payment platforms to security innovation to reduced costs and improved payment capabilities, 2021 is the year that will take the card tap to the mobile device and grow the economy in the right direction. 

South Africa faces a quadruple burden of disease: HIV, tuberculosis (TB), noncommunicable diseases such as Type 2 diabetes and injuries. South Africa has more people living with HIV than anywhere else in the world. Around 13.5% of the country’s total population has HIV.

Many of these patients are co-infected with TB and are also at risk of developing noncommunicable diseases. This can be attributed to a massive rise in noncommunicable diseases, including diabetes.

Research shows that in South Africa, a growing number of people with HIV are developing noncommunicable diseases – especially among poor populations in low urban socio-economic settings and rural areas.

The increase in number of people with multiple chronic diseases demands better, integrated and patient-centred care. But the country’s public health system – which caters for most of the population – is overstretched and uncoordinated. Patients accessing care from public hospitals experience longer waiting times, fewer screenings and drug stock-outs.

To get a better understanding of how patients are impacted by the lack of integration in the public health system, I recently conducted an ethnographic study among people living with HIV and diabetes in Johannesburg, South Africa. I wanted to document their experiences of accessing care for multiple chronic diseases. I observed patients as they visited different clinics and went to their homes to observe how they managed their diseases there.

My findings confirm previous research showing that care for patients with more than one disease is fragmented. The patients I followed often had to make multiple visits to health facilities for each illness they had. This was challenging given that these patients needed routine medical care and treatment for each disease. It cost them time, effort and lost wages.

The situation was exacerbated by socio-economic factors such as poverty, unemployment and food insecurity. These factors made it difficult for patients to manage their illnesses at home.

Chronic care and self-management

My research looked at patients at a public tertiary hospital in Soweto, South Africa. The hospital houses a number of speciality clinics. Patients reported many challenges accessing health services for their multiple illnesses.

The first challenge related to fragmented care at the tertiary hospital. This was partly due to the structure of the tertiary hospital which offers specialised care. Although diabetes and hypertension were managed together in one clinic, patients had to visit other clinics for any other illness that they had:

I attend different clinics … HIV clinic, diabetes clinic and podiatry clinic.

Service providers at the specific clinics rarely collaborated in managing patients. This was attributed to poor communication between the clinics and the lack of a centralised patient information system. As a result, some patients reported receiving conflicting information from different clinics:

The problem is that one doctor will tell you to do this and another asks you to do a different thing.

Some primary health care clinics in Soweto provided comprehensive HIV services. But comprehensive diabetes care was only provided at the tertiary hospital. This was due to drug stock outs and nurses lacking skills in managing diabetes at primary clinics. As a result, many patients with diabetes were referred to the tertiary hospital, though they could easily be managed at primary clinics.

The distance to the tertiary hospital and transport costs were other challenges hindering patients’ access to care. Many patients missed their clinic appointments.

Conducting observations in patients’ homes provided more insights on the difficulty of accessing care and self-management at home.

Poverty, unemployment and food insecurity emerged as key problems. For example, many patients couldn’t afford the recommended diet. Others couldn’t afford a simple meal as described below:

Nobody is guaranteed of eating in our house. We depend on a feeding programme in a nearby public primary school. Sometimes, we miss the food. This is why I have to skip taking my insulin because if I take it [without eating], my body gets weak, I shake and feel like going mad.

In many households, there were at least two people with chronic conditions. At the same time, more than half of the participants were unemployed, while some relied on social welfare grants provided to the elderly by the South African government. The grant was said to be insufficient given that many households were not only poorer but also larger in size. As a result, managing chronic conditions was difficult because of limited shared resources.

Some participants were the main breadwinners or caregivers in their households. They prioritised taking care of other household members, while neglecting their own health.

These findings highlight how social, economic, and medical complexities come together to shape health and illness in Soweto. In other words, chronic diseases such as HIV and diabetes interact with one another in a context of poverty, inequality and inequitable access to healthcare or what has been called “syndemics”. Medical anthropologists have clearly demonstrated that chronic conditions are rarely an isolated problem, but part of a complex mix of biological, social and economic factors.

Adding the COVID-19 pandemic into this mix has made the whole situation even more complex. Unemployment has risen and the Hospital Association of South Africa has warned that many people have been arriving late with very serious health conditions due to concerns around COVID-19 infection during clinic visits.

Strengthening primary healthcare

Stronger chronic care is needed at primary healthcare clinics in South Africa. This can be done by ensuring consistent and adequate drug supplies, sufficient equipment and trained staff. This will ensure that patients get care closer to their homes. In addition, patients need to be educated about self-management at home.

Specialists at tertiary hospitals must engage and communicate among themselves when managing patients with multiple chronic diseases, and engage with providers at primary care clinics. This is important given that some patients may still need to visit both primary clinics and tertiary hospitals for specialised care.

Strengthening communication within the health system broadly, and clinics specifically, is paramount. This is important to ensure that clinicians know when patients visit other clinics and what medicines they are taking. This will minimise conflicting recommendations provided to the patients.

Clinicians could use phone calls or social media platforms to communicate with patients at home. This might reduce unnecessary physical contact during COVID-19 pandemic.

Healthcare providers must understand patients in their socio-economic and cultural contexts. This calls for training clinicians on structural competence and cultural humility.

Lastly, policy makers must address unemployment and food insecurity in South Africa. Moreover, people working on health promotion and disease prevention can collaborate with community networks which have been developed during the COVID-19 pandemic for screening and contact tracing. These networks can help connect individuals facing tough economic situations to existing support groups; or linking the sick to hospitals.The Conversation

 

Dr. Edna N Bosire, Researcher, Developmental Pathways for Health Research Unit (DPHRU) & DSI NRF Centre of Excellence in Human Development., University of the Witwatersrand

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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