Rapid country assessment: South Africa: the impacts from a COVID-19 shock to South Africa’s economy and labour market

Rapid country assessment: South Africa: the impacts from a COVID-19 shock to South Africa’s economy and labour market

Ilan Strauss, Gilad Isaacs, Josh Rosenberg and Patieene Passoni
International Labour Organization
2020

The objective of the rapid country assessments launched by the Employment, Labour Markets and
Youth Branch (EMPLAB) of the ILO around the world is to provide constituents and other stakeholders
with a practical tool for the real-time diagnosis of the employment impacts of the COVID-19 pandemic
to inform policy responses. The assessments examine the dramatic effects of the pandemic on
economic growth and employment and how it has exacerbated labour market vulnerabilities and
inequalities. They also show the importance of a prompt and targeted policy response and the value of
social dialogue.

Given the large number of jobs lost in the wake of the 2008 global financial crisis (GFC), and the larger
size of the COVID-19 crisis, via health and economic channels, we can expect at least as many job losses,
if not more. South Africa has been the hardest-hit African country; globally, it has the 5th highest number
of Covid-19 cases, despite some of the strictest lockdown regulations. Compounding this situation, the
pandemic has come at a difficult time for South Africa. Last year the economy was already slowing,
leading to increasing unemployment. As a result, the Covid-19 crisis has led to a fall in formal
employment and 9 out of 10 South African businesses have reported losses in turnover.

This assessment investigates the short-term impact of the COVID-19 crisis on the South African
economy and labour market, as well as exploring the effectiveness of measures related to the
containment and reopening stages of the crisis. The results present a somber picture on employment
outcomes, revealing that groups, who were already disadvantaged before the crisis, have been
disproportionately affected.

The response to the COVID-19 pandemic needs a combination and sequencing of measures related to
the containment, reopening and eventual recovery once the global pandemic has been brought under
control. The four pillars of the ILO Covid-19 policy framework highlight the importance of maintaining
stimulus, continuing support to enterprises, jobs and incomes, protecting workers in the workplace,
especially for those at the frontline and using social dialogue to arrive at more effective policy solutions.

Over the longer term, policymakers around the world need to address the persistent inequalities that
have been exacerbated by the COVID-19 crisis and work towards building a better future of work and a
more resilient labour market