The public debate on strategies to tackle Covid-19 often unhelpfully positions health and economic considerations in a diametric fashion – as trade-offs. In fact, economic policy has health consequences. And health policy has economic consequences. The two need to be seen as parts of a coherent whole.
In the case of South Africa, the country currently faces three interrelated problems. These are the public health threat from the Covid-19 pandemic, the economic and health effects of the lockdown, and a range of intractable economic problems not directly due to the current pandemic. These include high unemployment, low economic growth and falling per capita income.
Any potentially viable response to Covid-19 needs to address all three aspects in concert. This is particularly important as the country plans for the next stage of its response after the lockdown. Focusing only on the health challenges and not paying attention to the economic issues will result in significantly higher economic costs, and will also undermine the health imperatives.
Our view is that a protracted lockdown won’t necessarily have the effect of ridding the country of the virus, but it will result in unacceptably high health and economic consequences.
The initial lockdown was prudent and is likely to have lowered the risk of community spread of SARS-CoV-2.
But the true number of Covid-19 (the disease caused by SARS-CoV-2) cases is difficult to quantify. A limited number of tests have been done, and community-wide screening for suspected infectious cases has been delayed.
The available evidence on the Covid-19 pandemic suggests that any initial containment of the disease through a lockdown will be short-lived. Also, it’s likely to result in a rebound of cases in the absence of aggressive community-wide screening for SARS-CoV-2 infectious cases, isolation of the identified cases and quarantine of their close contacts for at least 14 days.
On top of this, South Africa may find itself permanently harmed by the simultaneous destruction of both the demand and supply sides of the economy under an extended generalised lockdown.
This will have other unintended long term health and economic consequences. For example, an extended lockdown could result in the undermining of other health services, such as the immunisation of children.
The economic effects of a lockdown, too, are severe.
Early forecasts suggest significant economic disruption from the current lockdown, which is costing the economy an estimated R13 billion per day. Preliminary projections by the South African Reserve Bank indicate that South Africa could lose 370 000 jobs in 2020. Projections by private banking analysts (based on the initial 21-day lockdown) suggest a GDP contraction of 7% during 2020, leading to a fiscal deficit of 12% of GDP (forecast at 6.8% in the 2020 budget) and a debt-to-GDP ratio in excess of 81% in 2021. This means that the country’s already limited public finances will be further constrained.
Towards a post-lockdown strategy
Globally, attention is turning from initial containment through generalised lockdowns to short- and medium-term risk-based public health and economic strategies. We present some considerations for a health and economic policy beyond the lockdown in South Africa.
In this we proceed from the following assumptions:
South Africa’s health and economic strategy beyond the current lockdown must be designed to ensure good health care and be economically sustainable. We argue that the country needs to transition to a risk-based strategy which offers effective health protection and allows for the resumption of some economic activity.
Accordingly, the following objectives should be central to any policy.
Economic and health strategies
At the highest level, there are three broad intervention strategies available to South Africa (summarised in the table below), adapted from a recent article by leading Australian health academics James Trauer, Ben Marais and Emma McBryde. We believe that option three is the only practicable one for South Africa. And the details of its implementation matter.
Table 1: Typology of interventions and risks
A health strategy based on an
extended generalised lockdown is economically unsustainable. It is also
damaging to public health. Instead, we need a unified health and economic
strategy that allows for some economic activity while inhibiting the
uncontrolled spread of the virus. This requires a number of health and economic
measures to be implemented in a coordinated manner.
First, to reduce the rate of
infections, the country must have ready the capability of mass virus testing
and efficient contact tracing before the end of April 2020. This must be
accompanied by a comprehensive approach to social distancing. Relying solely on
screening of symptomatic individuals will not effectively reduce the rate of infection because high
viral loads of SARS-CoV-2 in the upper airway occur in pre-symptomatic and
possibly asymptomatic people.
To be successful, the scale of
testing needs to be at least equivalent to that in South Korea (17 322 tests per day in
South Africa, eventually testing 1 in 150 people). At best, it must be
equivalent to that carried out on Germany (36 399 tests per
day in South Africa).
Test turnaround times must result in
identification of infected individuals within 12 to a maximum of 24 hours. This
must be followed by immediate isolation and contact tracing. Isolation of
infected individuals and contact quarantine must last for at least 14 days,
either at home, if suitable, or in designated isolation and quarantine
The annual cost of conducting 17 000
tests per day is approximately R5 billion. There would perhaps be an additional
annual cost of R4 billion for contact tracing and quarantine. These costs
compare favourably to the daily economic cost (R13 billion) of the generalised
Secondly, economic activities must be
allowed in a way that is consistent with the aim of preventing the uncontrolled
spread of the virus. Within the constraints of the health strategy outlined
above, a risk-based economic strategy is required that balances economic and
Decisions on differential opening of
the economy should be made in line with the criteria proposed in a recent paper by German researchers.
This includes, for example, opening sectors with low risk of infection (highly
automated factories) and less vulnerable populations (child-care facilities)
first. It could also include areas with lower infection rates and less
potential for the spread of Covid-19. Of course, these decisions will have to
be based on a careful assessment of factors such as household structure and
composition in South Africa, and public transport.
To do this, the country will need
excellent data on the extent and location of any community outbreaks of the
virus. Such data will be generated by mass testing, and accurate information
about the ability of certain sectors of the economy to reopen safely and in
compliance with the health protocols.
The health and economic strategy will
thus need to be implemented in a dynamic fashion, responding to the latest
article has been amended to reflect updated estimates of the daily cost of the
Coovadia, member of the University of the Witwatersrand Council, also
contributed to the discussions that led to the writing of this article.