Alec Hogg: 2Q GDP plunge quantifies cost of SA’s lockdown
In late March when president Cyril Ramaphosa told the nation a strict lockdown was required to stop the spread of Covid-19, he was taking a decision he knew would be expensive. Now that the tally is in, he must be wondering whether it was worth it.
The cost of the lockdown has been quantified at R750-billion. Yesterday, Stats SA disclosed South Africa's economic activity dropped 51% in the three months between April and June. The country's GDP is $350-billion a year, equating to roughly $88-billion per quarter.
So according to the official data, losing half the GDP of a quarter wipes out an astonishing $44-billion worth of economic value. That's three quarters of a trillion rand give or take some political pocket change. A hefty price for freezing SA's already struggling economy when the result was preventing the earlier passing of a few thousand already sick and mostly elderly people.
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