Tag: covid-19

South Africa is experiencing an unprecedented e-commerce boom, with transaction rates peaking at higher levels than Black Friday.

After many weeks of crippling retail restrictions which formed part of the national COVID-19 lockdown in March and April, unlimited ecommerce was allowed from 15 May.

The new regulations allowed all goods to be sold through ecommerce platforms, except for alcohol and tobacco products.

South Africans flocked to online shopping sites to buy products which were not allowed to be sold during the level 5 lockdown.

Many online shopping sites saw record sales on products like gaming consoles, laptops, vacuum cleaners, treadmills and home gym equipment, and media players.

A source close to Takealot told MyBroadband the company is now generating close to R1 billion in sales per month – around double their usual volumes.

Takealot did not confirm these numbers when it was asked for comment, but other ecommerce players also told MyBroadband their sales have more than doubled in recent weeks.

Online shopping volumes have increased so rapidly that many online retailers are struggling to cope with demand.

Takealot’s distribution centres, for example, have been overwhelmed because of the increased demand. This, in turn, has resulted in deliveries being delayed.

Many other online shops have increased their expected delivery times by over a week to address logistics bottlenecks.

Big jump in payment processing – PayGate
The companies which have the best overview of online sales volumes are online payment platforms like PayGate and PayFast.

PayGate chief sales officer Brendon Williamson told MyBroadband they have seen a marked increase in transactions since unlimited ecommerce was allowed.

“On Saturday 30 May our transactions per minute increased by double our pre-lockdown average with liquor, food, and gaming being the biggest drivers,” said Williamson.

He added that they were experiencing transaction peaks four-times higher than that of Black Friday 2019.

He said lifting the restrictions on ecommerce resulted in many people using online stores to buy products they could not purchase during level 5 of the lockdown.

“We knew this would be the case and so we had always planned to scale our systems to meet the high volumes of transactions,” said Williamson.

“The reality was we had to boost capacity by 700% just to meet consumer needs in level 3.”

While the current boom in ecommerce sales is expected to subside, sales will still be higher than usual.

“While we will see some correction during June, we expect our monthly volumes for the rest of the year to settle at around 40% higher than last year,” said Williamson.

“We believe the simplicity and efficiencies of digital commerce will keep consumers coming back for more.”

Continued growth since April – PayFast
PayFast founder and MD Jonathan Smit told MyBroadband they have seen unprecedented week-on-week increases in the number of online payments made since the start of the COVID-19 lockdown.

“Following an initial dip at the beginning of April, the weekly trendline in total sales volumes shows incremental growth,” said Smit.

PayFast saw steady week-on-week growth throughout April, which continued into the first two weeks of May in anticipation of ecommerce opening up.

“Working off an already high baseline in the middle of May, total payment volumes grew by 20% in the first week after ecommerce restrictions were lifted and by another 17% the week thereafter,” said Smit.

PayFast transactions peaked in the final week of May, with another 7% growth compared to the previous week.

“The first two weeks of June have seen slight dips, which is in keeping with monthly online shopping trends that generally spike towards the end of the month when most people get paid,” he said.

Smit added that they have registered over 7,000 new merchant accounts over the lockdown period, surpassing any other high-volume period of registrations, such as the lead-up to Black Friday.

By Edward West for IOL

In just over a month since the R200 billion Covid-19 Loan Guarantee scheme to help small and medium sized businesses was launched, only R7-billion has been paid out – according to figures from the SA Banking Association (Basa) released yesterday.

The scheme, managed by the banks on behalf of National Treasury and the SA Reserve Bank (SARB), allows qualifying companies to apply for loans from their primary bank to fund three months operating costs, such as salaries, rent and supplier payments.

Economic commentators have criticised the scheme, arguing in particular that banks have applied normal risk vetting procedures for the loans, which were too stringent considering the plight many small businesses found themselves in and the uncertain trading environment in the future.

For instance, financial intelligence and research firm Intellidex noted on Wednesday: “The R200bn guaranteed loan scheme is a crucial centrepiece of “phase two” of the economic response to the Covid-19 crisis and is now one month old. Take-up, however, has been low.”

Basa said yesterday that the banks had approved just more than R7 billion in loans for 4 800 small businesses, since the scheme was launched mid-May.

Basa said, however, they expect the approval amount to grow as the number of applications for loans continues to increase. As at June 6, banks had received 29 700 applications for the loans.

The banks had rejected some 5 200 applications as they did not meet the eligibility criteria, as set out by National Treasury and the SARB.

Five thousand two hundred applications were also declined because they did not meet bank risk criteria.

However, about 14 100 applications were still being assessed, while 200 loans were approved, but not taken up by the applicants, Basa said.

Basa said the Covid-19 loan scheme was a commercial arrangement and required a credit approval process, to ensure that banks did not lend recklessly and to protect the fiscus,

“Business owners may be required to sign surety, based on individual bank credit processes.

In addition to the Loan Guarantee Scheme, in the two weeks to June 6, Bas members approved another R2bn in voluntary debt relief to individual customers experiencing financial distress due to the pandemic.

This brought the cumulative relief offered by banks since they started assisting individuals with targeted relief, to R16.5bn.

In the two weeks to June 6, the banks also provided additional cash flow relief, including payment breaks, to commercial and small and medium enterprises worth R1.4bn. This brought the cumulative assistance offered by banks to commercial and small and medium enterprises to R11.7bn.

Of the 131 600 applications received for relief from commercial and small and medium enterprises, more than 124 400 had already received assistance, Basa said

The cumulative assistance offered to individuals and commercial and small and medium enterprises businesses amounted to R28.2bn.

Source: Supermarket & Retailer 

Retailer Massmart, whose brands include Makro and Game, says SA’s Covid-19 lockdown resulted in about R2.3bn in lost liquor sales in April and May.

This is based on comparable sales in 2019, the group said, as it warned the pandemic had worsened losses this year, though pent-up demand had helped sales as SA’s lockdown has eased from level 5.

The group said in a trading update that it expected its headline loss per share for the 26 weeks to end-June 28 to be at least 50% worse than the headline loss per share of 364.7c previously.

Total sales for the 23 weeks to June 7 2020 amounted to R34.8bn, which is 10.3% lower year on year. Sales from its SA stores amounted to R31.3bn, 11.5% lower than last year.

The group said operating costs in line with higher safety protocols amounted to about R50m, but that it was comfortable with its balance sheet, and had secured a R4bn intercompany loan from parent Walmart.

The retailer is implementing an organisational shake-up that has seen its four divisions reorganised into two business units. It said, saying on Wednesday it was continuing this plan.

Massmart Retail will comprise the Builders, Game, DionWired and Cambridge Food trading brands.

Massmart Wholesale will take in Makro, Shield and the group’s wholesale cash brands.

By Londiwe Buthelezi for News24

Troubled clothing retailer Edcon says the reason it sent retrenchment notices to all its staff is because it has not received any binding offers from people interested in buying the company or any of its divisions.

The retail group’s executive of corporate affairs and communications Vannie Pillay said the company sent Section 189 retrenchment notices to 22 000 workers, meaning that jobs of everyone employed by the retailer are on the line – as the owner of Edgars and Jet has approximately 17 000 people employed on full-time basis and about 5 000 seasonal workers.

“We did send notices to all our staff as per the LRA [Labour Relations Act] because we have no binding offers that have been received at this stage. So, it’s the prudent thing to start consultations in terms of Section 189,” said Pillay.

Biggest retrenchment plan yet

Edcon’s move makes it be the biggest retrenchment plan yet that any local company has announced during the lockdown, blaming it on the coronavirus-induced restrictions. For instance, the national carrier, SAA which is also in business rescue said 4 708 jobs were affected when it started retrenchment consultations in March.

Edcon said before going into voluntary business rescue in April that the lockdown caused it to lose about R2-billion in sales and did not see any other way out of its woes. But in the business rescue plan that Edcon published on the 9th of June, its business rescue practitioner (BRPs) envisaged that employees would be transferred to potential buyers of Edcon businesses. At the time, the plan said only unavoidable retrenchments would take place if there are remaining employees who were not absorbed by the buyers after the accelerated sales.

The plan said there was no conclusion to be drawn that people working in “non-viable” stores would “definitely” be retrenched. The BRPs were supposed to get final offers from businesses and parties interested in buying Edcon’s divisions by the end of June and finalise successful bids by early July 2020.

Therefore, it was expected that the extent to which the company would be able to retain jobs would become clearer then. But the business rescue plan did budget R597-million for proposed retrenchments of employees whose jobs the BRPs might not be able to save.

By Vukani Mngxati, CEO for Accenture in Africa

COVID-19 is a global pandemic, evolving at unprecedented speed and scale. It is creating a universal imperative for governments and organisations to take immediate action to protect their people. Self-quarantine. Social distancing. Community spread. These formerly obscure terms are now everyday words. New habits and behaviours are forming that in many cases are not likely to go away after the crisis passes.

And while the impact to the economy is not fully known, both direct-to-consumer (D2C) and business-to-business (B2B) organisations are scrambling to meet the immediate needs of their marketplaces. In particular, those who have viewed digital commerce as a secondary channel now need to reorient every aspect of their business towards a digital commerce mindset. There exists an opportunity to double-down on digital commerce, augmenting existing offerings and creating new lines of service.

While this represents an opportunity to grow revenue, attract new customers and drive channel shift, it depends on digital channels and capabilities having appropriate scale and stability to handle the crush.
Reassure your customers and employees

There is unprecedented confusion on what, where and how to buy things, as customers are concerned about who to buy from, whether they are paying a fair price or even whether they will be able to find the essentials they need.

Unfortunately, some businesses who proved to be opportunistic and exploited customers by loading prices of critical items, contributed to this issue. This may have yielded profits in the short term, but in the long term, they will lose market share as customers are increasingly gravitating towards companies that are truthful, transparent and driven by a clear purpose.

These principles extend through customer channels and their engagement with retailers, as well as into B2B relationships and how companies work with their distributors, wholesalers, or manufacturing direct suppliers. This is amongst other confirmed by a study that was released in collaboration between the World Economic Forum (WEF) and Accenture in January 2020, which indicates that companies who execute stakeholder-eccentric leadership, display stronger financial performance.

If this was the case then already, this pandemic that currently affects the whole of mankind, has no doubt brought the need for human-centredness to the fore. Companies who can demonstrate these attributes will deliver a differentiated level of customer service and make themselves more relevant and connected to their customers – old and new – on an ongoing basis.

Stabilise your digital channels, platforms and infrastructure

With the closure of cafés, restaurants, bars and hotels and the grounding of airlines, much of this demand will need to be met by the grocery sector, online. That’s the new reality as mass quarantines and unpredictable retail stock availability cause online commerce to skyrocket. While this represents an opportunity to grow revenue, attract new customers and drive channel shift, it depends on digital channels and capabilities having appropriate scale and stability to handle the crush. Businesses must flex quickly to capture the opportunity, and systems must be prepared to withstand the increased loads.

Reconfigure and extend your offering for seamless online delivery

With the closure of retail establishments, and the disruption of supply chains, the rules for merchandise and inventory have fundamentally shifted. Historical data on what sells online vs. offline is out the window. Companies now have a lot of inventory that they are sitting on in retail outlets that they need to figure out how to get online.

Businesses that have historically invested in digital commerce sales tools will likely have an easier time adjusting to this new, digital first economy, while those that have only made moderate strides will be more greatly disrupted. For example, traditional auto auction houses are shutting down, while on-line auctions are fast becoming the norm – even in a reduced volume business, those that are digital-prepared are seeing increases. As businesses are realising the value of e-commercialising, this will in all likelihood also lead to a decline in the need for brick and mortar operations.

Power up your value proposition through power networks

All evidence points to the fact that the economy will continue to decline and that there will remain a requirement for social distancing for time to come. For this reason, customers will keep on abandoning brands they’ve been loyal to and migrate to companies who can deliver what they need in the fastest, easiest and most cost-effective manner. Better yet, if they can get it all from one single, service provider. This will require businesses to move beyond just creating ecosystems, to establishing power networks through symbiotic partnerships and collaborations to collectively expand their value proposition all together. At the same time, it is an enabler to establish lean and mean operations in an uncertain economic climate, whilst accelerating growth exponentially.

Leverage new behaviours for new growth

Naturally, the national lockdown forced business and society to start doing things differently. Gyms are helping their customers to stay fit through online fitness programmes. The healthcare industry is using virtual assistants and hotlines to respond appropriately to the COVID-19 crisis. Restaurants are providing online cooking classes. Consulting businesses and academies are providing information and counsel through webinars, online learning tools and systems. Businesses are enabling their staff to work remotely and are using online platforms such as Microsoft Teams to conduct meetings. Parents are using online mechanisms to educate their children, and tertiary students are tapping into online learning.

All these new behaviours can be leveraged for new business growth. For example, as South Africa has just moved to level 3 of the national response to the COVID-19 pandemic, only a portion of our children are able to return to school, and only some tertiary students are able to return to their educational institutions. This necessitates an extreme acceleration of the virtualisation and digitalisation of education, supplemented by substantially increased access to the internet, especially for those learners in disadvantaged and rural areas.

Unlock the potential of emerging trends

There is a myriad of trends that are emerging in this COVID-19 world, that present businesses with new potential avenues for growth. Health and safety are for example currently the first and foremost priority for both business and society and will in all likelihood not just remain a trend but become part of the new normal. Whilst discretionary spend is generally bound to decrease significantly, people on the higher end of the market who have been robbed of the pleasure of traveling for leisure, may be more likely to spend money on luxury items such as jewellery, to spoil themselves. In addition, every single person now requires enhanced access to the internet, more efficient technology and mobile devices to live, work and play from anywhere, at any time. This is a time to conceptualise novel solutions for at-home activity, at-home education, at-home entertainment and at-home workspaces.

Reassess relevance and reframe your strategy

Some of our industries that have been hit the hardest by the COVID-19 pandemic are the tourism, entertainment and beauty sectors. Businesses in these sectors have no choice but to reassess their relevance and adjust their strategies accordingly. While people are no longer able to go out and explore the whole wide world, the tourism sector will have to innovate ways to bring the whole wide world to them, by i.e. creating virtual tours or expanding their offering to include entertainment such as gaming. Entertainers can leverage online platforms to create worldwide events and distribute their material digitally. Hairdressers and beauty salons can provide ‘how to’ channels on a subscription basis and develop e-commerce channels for their customers to get the necessary products quickly and effortlessly.

Unlock the value of data to engage consumers optimally

As the landscape we find ourselves in is changing faster than ever before, the wants and needs of customers are also evolving at an unparalleled speed. The businesses who will be able to successfully deliver on these wants and needs, are the ones who are ever attuned to exactly who their customers are, what their preferences are, and what they may also need in future, before they even know it themselves. To this end, it is critical to acquire the most suitable technology to intelligently collect and interpret client data. However, in this ultra-competitive online race, it is no longer sufficient to simply deliver what customers want and need, it is also important how you deliver it. The businesses who will grab and retain their target audiences’ attention, will be the ones that leverage high technology to create immersive virtual spaces and continuously deliver the most engaging digital experiences.

Embrace e-commerce as a necessity, not just a priority

In conclusion, in this brave new COVID-19 world, digital commerce is no longer a priority, it is a necessity for the very survival of business. But whilst establishing their e-commerce facilities, business should never lose sight of what is first and foremost for their customers: Trust, relevance, convenience and economy.

Discovery warns of 90% profit plunge

Source: EWN

South African insurer Discovery said on Monday its full-year profits could fall by up to 90%, hit by a 3.3-billion rand ($191-million) provision to cover the potential impact on claims and policy lapses due to the coronavirus.

It also said it would not pay an annual dividend, with the payouts to be considered when appropriate, sending its shares down 5.5% before recouping some losses.

The company said the hefty provision covered the potential impact on claims and anticipated policy lapses as stretched customers stop paying, while the outlook also covered the impact of long-term interest rates.

It warned its headline earnings per share – the main profit measure in South Africa – for the year to June 30 were expected to be between 70% and 90% lower than the 789 cents reported a year earlier, though it said the final outcome was subject to a high degree of volatility.

“Discovery is confident that the group is strong under high stress scenarios, with sufficient liquidity and solvency to weather uncertain conditions,” it said, adding capital ratios and cash buffers were expected to remain within or above target.

The provision, Discovery said, was intended so that all of the currently expected impact of the novel coronavirus as far ahead as 2022 was carried in this financial year.

Changes to interest rates in South Africa after the government lost its final investment-grade credit rating earlier this year, and historically low interest rates in the United Kingdom where it has a unit, were expected to have a further substantial impact on performance.

Discovery’s profits have been falling in recent years as it ploughed money back into new businesses including a hefty investment in launching a digital bank, which it said now has 177,000 clients and 2.1 billion rand in retail deposits.

So far, lapses in most of its businesses had been low, it said, while new business annualised premium income was up 4% for the 11 months to May 31.

Insurers under pressure from Covid-19

By Londiwe Buthelezi for Fin24

It’s a grudge purchase, often the first expense to fall away when households’ budgets are strained. But South African insurers have shown different degrees of vulnerability to the challenges posed by Covid-19.

Those heavily dependent on face-to-face sales, like Old Mutual, would surely want to see an accelerated march to lockdown Level 1.

Given the recent trading updates and insurers’ experiences in April and May, the question is: who seems to be on the right path to maintain value for shareholders and whose vulnerabilities have been most exposed?

Everyone is suffering, in one way or another

Warwick Bam, head of research at Avior Capital Markets, says all insurers and pension administrators are taking some beating right now from retirement contribution holidays, insurance premium relief and additional cover they’ve advanced to support their customers for the next few months. But some will inevitably be more prejudiced.

“Intermediaries dependent on face-to-face interactions have been unable to sell policies in April and May,” says Bam, pointing out that Old Mutual is one player more reliant than others on face-to-face interactions at branches and worksites to sell.

Old Mutual told investors recently that it’s been difficult to sell, and that some existing customers asked for premium holidays and, in extreme instances, lapsed their policies.

But it’s not only insurers dependent on face-toface sales who suffered. During a call with investors, outgoing Sanlam CEO Ian Kirk said the insurer also struggled to sell.

In April and May, the insurer, which is the biggest in Africa, saw new business volumes tank between 50% and 70% compared to the same time last year, Kirk says. He foresees productivity will only return to normal when SA moves to lockdown Level 1.

Could Covid-19 have raised awareness on the importance of insurance?

However, Sanlam says it has been pleasantly surprised that its businesses – including Sanlam Sky, which serves low-income earners – has not shown the kind of strain it expected when it comes to lapses in April and May. Customers opting for premium holidays are likely to have stalled the lapse rate for now. But Kirk thinks there’s another factor at play.

“Obviously, there’s pressure on consumers. But when you go through something like this, people say ‘jeepers, I’ve got to keep my life cover going. I’ve got to keep my funeral plan in place’. It’s almost like there’s awareness on health and safety stuff,” says Kirk.

Momentum Metropolitan Holdings also says its lapse rates remained stable for life insurance products in April, but more people have asked for relief like premium holidays. The group is keeping its eye on the lapses in the medium term when levels of unemployment start to increase.

It looks like some insurers have seen this increased awareness as an opportunity. For instance, Discovery has enhanced a number of its products by adding a Covid-19 benefit. The insurance group, which is trying to grow its new bank, even launched Vitality Health Check for seniors, making itself ever more relevant to panicked insurance customers. Discovery did not respond to questions on whether these enhancements have improved its persistency ratio or attracted new customers.

But Bam thinks this is a well-thought move. “By tailoring products to Covid-19 risks, persistency is likely to improve as insurers can further justify the benefit of retaining cover when affordability declines,” he said.

When it comes to Covid-19-related claims, big life insurers aren’t too concerned. They haven’t yet recorded any material increase in death claims and many say they expect a modest increase in the coming months.

However, SA hasn’t reached its Covid-19 peak yet. Friday marked the 100th day since the first known Covid-19 patient arrived back in the country from a trip to Italy, and by Saturday 1 423 deaths had been recorded.

But even when claims start rising, insurers have deep pockets to finance these, and have reinsurers to fund the rest.

Bam says the bigger listed guys in particular have strong balance sheets which “can withstand almost any eventuality in the current Covid-19 scenario”. Sanlam has already set up a “pandemic reserve” of R760 million.

But job losses threaten to setback the whole industry

While things like funeral cover could be on top of consumers’ minds now, employment levels will determine if insurance will remain a line item in households’ budgets.

South Africa’s largest pension funds administrator Alexander Forbes is already preparing itself for the worst as its success depends largely on having more people formally employed and saving for retirement. Alexander Forbes offers both retirement and group life insurance that people subscribe to in their workplaces.

Like Kirk, Alexander Forbes CEO Dawie de Villiers says people are asking for advice more than ever as they try to navigate their retirement and investment options under Covid-19. However, while the importance of financial advice has been elevated, De Villiers says the rising number of employers announcing retrenchments is causing a headache for the industry.

“We haven’t seen any retrenchments come through, but we believe that there will be retrenchments. We also agree with the analysts’ numbers about the unemployment rate going maybe up to 35% from the current 29%, and that will affect our bottom line as less people belong to schemes,” De Villiers says.

Source: MyBroadband

While the impact of COVID-19 on IT and telecoms companies is not as severe as many other industries, these industries are still faced with big challenges because of the downturn in the economy.

ICT companies which have a lot of exposure to the travel, tourism, and restaurant industries, for example, have to deal with a significant loss in revenue.

One of these companies is Adapt IT, which said the negative impact of the lockdown on its clients in the hospitality sector has resulted in 20% of its employees being unable to work or perform their regular duties.

The poor forecast of the hospitality sector has forced Adapt IT to consider staff cuts, and it is currently in a consultation process with 4% of its permanent staff who may be affected.

Altron COO Andrew Holden told MyBroadband they have had to effect temporary layoffs due to the inability of some customers to pay for services as their businesses had been affected by the lockdown.

“Where possible, Altron will seek alternative opportunities for affected employees within the group. Retrenchments are a last resort, and will be limited as far as possible,” said Holden.

Many other large tech companies like Altron, Dimension Data, Blue Label, and Alviva have also indicated that staff cuts may be necessary in the event of a prolonged economic downturn.

Salary cuts
Many South African IT companies had to implement salary cuts to mitigate the financial impact of the lockdown.

Salary cuts in the IT industry were necessary for two main reasons:

Many clients stopped paying because of the impact of the lockdown on their businesses.
Employees could not work because their clients had to close their businesses during lockdown.
In April, EOH CEO Stephen Van Coller announced that the company’s executive committee would take a salary reduction of 25%, with other staff taking a 20% pay cut.

This was needed because of the anticipated drop in payments from clients and future uncertainty on the full impact of COVID-19 on the economy and the company.

Cell C also implemented salary cuts and used the COVID-19 TERS Relief Funds to cover the shortfalls for those employees to the extent provided by the UIF.

Alviva told MyBroadband there were no mass pay cuts at the company, but that it had to implement salary reductions in a few isolated cases.

Altron followed a different approach to ensure the sustainability of the company. Instead of cutting salaries, it reversed all salary increases granted as of 1 March.

Good news for the telecoms industry is that very few of the large mobile operators and ISPs had to implement salary cuts during the lockdown.

Vodacom, MTN, Telkom, Liquid Telecom, Rain, Afrihost, Cool Ideas, and Cybersmart said they have not implemented any salary cuts during the lockdown.

The outlook for the South African ICT industry
While many large IT and telecoms companies were able to prevent retrenchments, they warned that the full impact of COVID-19 may result in staff cuts in future.

Alviva said the full impact of the COVID-19 pandemic on the economy and the company will inform their decision regarding future staff cuts.

Blue Label echoed this view. “Should the lockdown persist indefinitely, and economic conditions continue to adversely impact ourselves and our customers, hard decisions regarding retrenchments will have to be made,” the company said.

Dimension Data told MyBroadband should the need arise to reduce its workforce to ensure sound and responsible fiscal management, it would be done only after exhausting all possible alternatives.

“We will always take a long-term view of the market opportunities, trends, economic outlook, and investment and spend forecasts and put them in the context of our strategy and vision before making any decisions,” Dimension Data said.

Telkom said while it has not cut any salaries at this stage, it is still studying the impact of the virus and the lockdown on the business.

Schools re-open – with mixed results

Schools across South Africa opened on Monday 8 June, after a two-and-a-half month shutdown due to the coronavirus pandemic.

For many schools, only Grade 7 and 12 pupils were welcomed back; however, smaller private schools that passed inspection were able to open fully.

Gauteng reported 85% attendance of both teachers and pupils on the first days of back-to-school after the lockdown closure. There are now 30 schools in Gauteng that have reported cases of Covid-19.

The Western Cape, which began classes a week earlier on Monday 1 June, says 55 schools have been affected by cases of Covid-19 in the province. A total of 11 Western Cape schools were closed on Friday last week due to Covid-19 concerns.

A Port Elizabeth high school teacher tested positive for Covid-19, resulting in the closure of Ikhwezi Lomso Comprehensive High School in Zwide township.

In East London, Parkside Primary School and East London Secondary School have both closed indefinitely due to suspected Covid-19 cases.

Two Durban high schools were forced to close on Tuesday after a teacher at each school tested positive for Covid-19.
Matric pupils at Clairwood Secondary and Apollo Secondary, both situated south of Durban, were cautioned to remain at home one day after school resumed on Monday.

On Tuesday evening, there were a total of 52 991 confirmed cases of Covid-19 across SA, with 1 162 fatalities.

By Anneken Tappe for CNN

The Covid-19 pandemic and subsequent lockdown measures have thrown the world economy in turmoil. Even as countries are reopening, the World Bank predicts this year, the globe will have its deepest global recession in 80 years.

The pandemic, which has infected some seven million people worldwide, led countries to order citizens to stay at home and business to grind to a halt.

Worldwide gross domestic product — the broadest measure of economic growth — will contract 5.2% in 2020, according to a report by the World Bank. That’s despite the unprecedented fiscal and monetary policy support governments around the world have been rolling out. Trillions of dollars have been deployed to help companies stay in business, keep cash in consumers wallets and let financial markets function properly.

Still, advanced economies, such as the United States or Europe, are projected to shrink by 7%. America’s economy is expected to contract by 6.1% before rebounding in 2021.
This quarter will almost certainly be the worst for the Western world, but most of Asia felt the brunt of the outbreak in the first months of the year.

China, the world’s second largest economy, is projected to grow 1% this year, down from 6.1% in 2019, before bouncing back.
The pandemic recession will probably leave deep scars: Investments will stay lower in the near term, and global trade and supply chains will erode to some extent. On top of that, millions of people have been laid off, causing the biggest blow to America’s labor market since the Great Depression. The US Federal Reserve has stressed its concern about laid-off workers getting detached from the labor force as a result of the crisis.

The recession would be even worse if it took longer than expected to bring the pandemic under control, or if financial stress forced a number of companies into bankruptcy.

On Monday, a monthly survey from the American National Association of Business Economics found that a second wave of infections was the biggest risk to the US economy.

Emerging economies are in particular danger, because their health care systems are less resilient and they are more exposed to woes in the global economy through supply chains, tourism and reliance on commodity and financial markets, the World Bank report said.

At the same time, low oil prices, which collapsed in April, could help jump starting the economy in the initial stages of reopening, the World Bank acknowledged.

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