Every single person in the world now knows how many problems the coronavirus pandemic has caused. The lockdown made a huge impact on the economy of many countries. Some of the countries tried hard and found effective solutions to economic problems, but a lot of them still suffer.
Impact of the pandemic in South Africa
One of the countries which still has to deal with the impact of COVID-19 in South Africa. The statistics show that the rate of poverty increased, the number of workplaces decreased and the whole economy of the country is at the risk. But it is important to mention that it is not only the economical loss that pandemic caused in South Africa. Education, culture, health, and even the psychological well-being of the people are in danger.
Despite the lockdown restrictions which started on May 1st, the government couldn’t stop the virus from spreading throughout the country and the number of cases in South Africa was terrifically high. In fact, today’s data proves that the country has the highest rate of Covid-19 cases in Africa, yet the death rate is not as high. But the main field which is in the biggest danger and which still deserves the most of the attention of the government and the society is obviously economics.
SA Job Market
A lot of NGOs and official sources confirm that South Africa had the worst hit to the economy and especially, it was and still is a huge trouble for the job market. At the beginning of the lockdown, about 3 million people lost their jobs because of the pandemic and it caused issues of food security and increased level of poverty in general in the country. Early in February, South Africa’s job market was already facing the big challenge but what the pandemic caused was something different and way too serious than what was before.
It should be noted that coronavirus basically shrunk South Africa’s private sector’s jobs, which put all the achievements of the country in this field in danger. It is obvious that the African labor market is facing more problems than many other countries. For example, the situation after the lockdown in European countries like Germany and France is more stable. But South Africa’s labor is less rigid and has poorly adapted with new situations and new challenges they are facing now.
Experts try to find out reasons for the steady economical problems of the country. One of the main reasons can be society’s poor engagement to find effective solutions. Most of the people stopped thinking globally for the country in general and started analyzing the problems from their own point of views. This is why many people have been trying to find an alternative income source that they can generate from home. So we can say that the pandemic made many of South Africa’s citizens a freelancer.
One of the most effective of the home-based alternative jobs which the citizens started to seek during the pandemic was forex trading. Forex trading is the foreign exchange market that specializes in exchanging currencies between countries and works globally. The Forex market is the largest and the most liquid market in the world and the profit made from it can actually be enormous.
The South African trading market took a huge part in increasing the popularity of the Forex market throughout the world. According to multiple sources, there are several reasons for this. First of all, Forex provides flexibility in trading but one of the main reasons is the Rand’s popularity over other currencies among traders. So, Forex trading can be a great alternative job for South Africans, and in fact, there are a lot of successful forex traders in South Africa whose stories have been inspiring young traders in the country for years now. For example, Sandile Shezi, George Van Der Riet, Reg Wayne and etc. These people are well-known for their success in trading. They became millionaires, developed special trading skills, and inspired as well encouraged a lot of young people to do the same.
Mboweni’s forecast and plans
However, those alternative ways of increasing incomes turned out not sufficient enough for dealing with the economic crisis. South Africa is on the edge of the crisis. Tito Mboweni, the finance minister of South Africa said that the economy of the country will shrink by more than it was predicted before. The Reserve bank’s forecast for 2020 was a 7.3% decrease but now analysts say that it is expected for the economy to shrink about twice as much as it was predicted.
Moreover, the National Treasury predicts that the current year’s actual GDP outcome will probably be lower than usual. Mboweni considered an investment in electricity as the main threat. In fact, the most important danger to fiscal stability is Eskom. It is a South African electricity public utility that provides supply to electricity to support economic growth. Its main aim is to take part in improving the quality of life of South Africans. But since it has a debt of about R500 billion, it is hard not to consider Eskom as a big threat.
What is the solution? Mboweni says that the government hasn’t come up with the idea of a new plan but they still remain optimistic about the economic problems of the country. Despite the critics, that they don’t work effectively on the problem of the Eskom and the speed of carrying out new reforms is too slow, what the government plans is just implementing already existing commitments and using mechanisms for escalating challenges. Though they do hope to implement the idea quickly. But the details of the plan are still unknown and the society still doesn’t know if South Africa ever survives the traces left by the pandemic and serious problems which still bothers its population.