COVID-19 in South Africa: 2020-03-27

While the number of new infections has fallen sharply from February’s peak, authorities worry about a second wave of infections triggered by returning Chinese, many of them students.

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In response to the COVID-19 epidemic, the South African government declared a national state of emergency on March 15, 2020. Measures included the partial closure of borders, the closing of schools and prohibitions on events involving more than 100 people gathering.
On 2020-03-27 South Africa reported its first fatality from COVID-19. This comes as the country confirms 1 170 cases of the virus and enters its first day of a national lockdown. The announcement of the fatality was expected as countries typically report their first fatality well before they have 200 confirmed cases. Only the Czech Republic had recorded a larger number of cases before their first fatality. Germany, the next best scenario, had recorded 1090 cases before their first fatality. South Africa’s low death toll may be a reflection of the socio-economic status of the early victims or significant information lags.
At the current rate South Africa can anticipate over 4000 confirmed cases before April.

The economic impact of COVID-19 was seen well before there was a significant number of infections. Initially, markets reacted to the global clampdown on international travel and the associated reduction in trade. South Africa’s JSE fell sharply on the back of a recession in the preceding two quarters. International trading ensured that the Rand fell relative to major currencies – despite these other economies being in similar emergencies.
The lockdown, which came into effect on 27 March is sure to have massive additional impact on the economy. However the impact will be more evident in terms of declining household income than in crashing stock prices or exchange rates. In the context of high household debt levels, the decline in income will have an impact on household welfare well beyond this emergency. Further municipalities, already in financial distress, will be among the institutions worst affected as households hold back on payments. While the impact on declining income is immediate it may only be possible to quantify the impact several months from now.
Prior to the national lockdown, share prices had regained a significant proportion of their losses.

- The JSE ALSI index is taken as representative of the general trend in market value. This is shown as a proportion of the highest ALSI since January.
- The Rand/USD rate is representative of the value of the ZAR. This is is shown as a proportion of its highest value since January.