Since the announcement of covid-19 outbreak in the first quarter of 2020, the South African economy has been struggling to grow due to the fact that most economic activities were put on hold. Since the introduction lockdowns regulations in the previous year to curb the spread of the pandemic, sectors such as mining, manufacturing, transport, tourism and trade have been battling economic wise. The third and fourth quarter of 2020 saw most sectors showing signs of recovery as they registered positive growth rates. That momentum continued to the first quarter of 2021, where the South African economy grew by 1.1% (–quarter-to-quarter) which translate into annualised growth rate of 4.6%.
Eight of the ten economic sectors recorded positive gains in the first quarter of 2021, with finance, mining and trade making the most significant contribution to this growth. While on the other hand, the agriculture, fisheries & forestry industry performed poorly in the first quarter in comparison to the previous quarter, dragged lower by weaker production figures for field crops and animals products. The agricultural sector was one of the critical sectors that contributed positively to the south African economy (realised an annual real GDP growth of 13.1% in 2020) during first and second wave of covid-19 infections. Therefore, it is without a doubt that the sector will continue to contribute significantly to South African economy as the country continue to struggles against third wave of the coronavirus.
However, the acticipated third wave of covid-19 possess a threat to delaying the recovery of the economy. In response to South Africa entering the third wave of covid-19 infections, president Cyril Ramaphosa has announced that the country would be placed on adjusted alert level 4, in accordance to the country’s risk adjusted strategy. The lockdown measures are designed to allow for as much economic activity as possible whilst limiting social contact. Therefore, the current measures are antipated not to have severe effects on a broader South African economy unless more measures are announced which will limit the economic activities. However, transport services and tourism sector will likely experience severe impacts due to the limited mobility of persons within the economy. The restaurant and alcohol industry are amongst the few industries that will be hardest hit after the country moved to level 4 which might also result in thousands of job losses due to the newly announced restrictions. The restrictions instituted to mitigate the third wave impacts are likely to be short terms (announced 14 days), however, this is dependent to the bahabiour of South African citizens and recorded positive cases.