Urgent need for an economic package to contain the COVID-19

Kgosietsile Ngakaagae | Friday March 27, 2020 12:04

We may not have registered the first patient yet, but there’s no denying that there is going to be enormous economic consequences on our economy owing to external factors. 

Remember, when South Africa (SA) sneezes, we catch a cold.  We rely on our neighbour basically for everything – power, water, food, essential medicines and so forth. 

SA is officially on lockdown, and consequences will be devastating. This therefore calls for a programme to save our economy.  We can put up a humble, creative package to save our economy. 

Nobody really knows how long the crisis will last.  The US has put in a one trillion dollars programme to stimulate their economy. 

The UK has also come up with a US$400 billion package that goes towards, amongst others, paying 80% of all employers’ wage bills.  France has called for a moratorium on utilities, taxes, servicing of personal loans and rent to landlords.  Just next door, the South African government has re-prioritised budgets, tapped into their Debt Relief Fund, cut interest rates and are even dialoguing with financials services firms to consider putting on hold debt servicing commitments for now.

We can’t fold our hands and say there is no money.  Doing so will be irresponsible. It will create an untold meltdown and an implosion with far-reaching consequences. Mind you, our economy was already showing signs of weakness.  An economy that was battered by the BCL closure and many other challenges.  That we face a shut down is certain. The question is when.  It will be either internally or externally imposed on us. We have seen South Africa pronounce that they will be closing their borders for an extended period. 

As I write, the hospitality industry is on its knees.  Most, if not all our luxurious camps in the Delta, CKGR and Makgadikgadi have closed. These lodges employ thousands directly or indirectly through suppliers and agencies. For those in the high volume hospitality industry, their businesses have been decimated.   People aren’t travelling at the moment.  

There are zero bookings in bed and breakfast lodges that relied on government business. Retail is on its knees. Bars and restaurants opening and closing hours have been curtailed. More sad is that fact that the Americans and the Chinese most immediate needs are not diamonds.  Diamonds are for the good times, and for now our two biggest diamond markets are internally focused.   Diamond sales will be weakened, thereby dropping our export receipts.

One of the biggest fears of the vulnerable in society is loss of their jobs as their businesses foreclose, and they are unable to get by, month to month. These people are breadwinners with extended families depending on their low salaries. They have credit obligations and will incur the wrath of opportunistic financial service providers. Medical aid memberships will be cancelled for non-payment. And yet, this is the time where healthcare is needed most.  Public health hospitals are already under pressure. I am saying that our economy is looking very fragile, and it needs to be assisted. We are all in need of a lift. Individuals, small businesses, hoteliers, retail and mines need assistance.  I move that government considers the following measures; Recall some of the foreign reserves and pump money into the healthcare system to provide for temporary health infrastructures, quarantine facilities

Revamp Ipelegeng into a national fumigation scheme, that will invariably create temporary jobs Tap on the Disaster Fund to roll out a programme of assisting the most vulnerable in society; extend it to allow for companies to seek rent assistance, and also for households to get assistance for rent to pay landlords

Engage with Bank of Botswana to put in place a moratorium to hold bank repayments.  This is not a cancellation of debt but a deferment.

Ask corporates to use 30% of their current savings to continue keeping employees on the job. This will be offset against a special tax holiday in next year’s budget. Prevail upon the utility companies to stop demanding payments from people. Engage with BOFINET and other data providers to ensure kids are able to connect at home and continue their studies.

Engage with Kgalagadi Breweries to use some of their existing infrastructure to manufacture sanitisers instead of alcohol as is being done currently in the US. Get private sector Botswana to put in a hand.  Create a BW COVID-19 Response Fund that they can contribute a minimum 10% of their revenues; Many big construction firms have a preferential procurement of government; it is about time we measure their commitment to their country.

Get companies to adopt communities that are immediate to them.  They can help with a job creation initiative to fumigate public facilities, public education, erection of temporary clinics, handing of sanitisers and food banks.

Halt the ridiculous 22% electricity tariff hike!

These suggestions are only temporary. They are entrepreneurial in thought and do not call for all answers to come from government.

They will get the nation working together to save the economy from implosion, allowing employees to maintain jobs, while employers are relieved the pressure of paying rent and interest to creditors.  This will help the whole nation focus on curbing the spread of the virus, and more importantly build national cohesion and solidarity.