For a chilling picture on what the Covid-19 containment plan is doing to South Africa, listen to B4SA and Brand South Africa heavyweight Stavros Nicolaou. He pulls no punches, pointing out that for the economy there is “no good news, only degrees of bad news”. From a health perspective, a spike in Covid-19 cases and deaths will come, too, warns Nicolau. He is Aspen Pharmacare Group’s Senior Executive responsible for Strategic Trade Development and is involved in national strategic discussions on screening and testing for Covid-19 as well as efforts to procure the personal protective equipment necessary to protect medical personnel and others on the frontline. His message to BizNews editor-in-chief Alec Hogg in this podcast is that lockdown should lift soon as the country’s leaders address both the health and economic challenges, albeit unevenly. – Jackie Cameron
Stavros Nicolaou joins us now. Mr Nicolaou, we were watching – with a lot of interest – the Business for South Africa press conference earlier this week. You’re involved there – what is your role in Business for South Africa?
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Business for South Africa has come together across all sectors of business and has set up three clusters; an economic cluster, a labour workplace related cluster and then a public health cluster. Each of these is aimed at a different aspect of business as a response to the pandemic. I’m the stream lead of the public health cluster.
Presumably, you have to have equipment that protects the health workers. And we heard at the press conference earlier this week that there was R1.7bn worth – that is either on order or in the country.
So Alec, our role is very much to fill the gaps where there are deficiencies – in PPE and medicines, vaccines- wherever it might be. So, in our assessment that we’ve done – and we’ve got great support from the Big Four audit firms (they provide us with the project management capability and resource that we need to do all of this) – there is a team of 200 plus people that are working on this. And in our assessment to fill the gap – understanding that you’re still going to have your normal operators that continue to bring product into the country – ours is a supplementary and complementary role to date. Filling the gap means that in the next four to eight weeks we need to buy around 1.6 – 1.7 billion rand worth of PPE. We have achieved roughly (from an audible point of view) around a third of what we need to achieve, but I must just hasten to add that we had an example yesterday where the shipment that arrived doesn’t meet the quality standard that’s been represented to us – that sort of shipment you would reject. So, it does become a bit of a moving target but we are getting more wins than losses here in the stuff that we’re importing – so that’s important.
What exactly are PPE’s – what are you trying to bring into the country?
So PPE is an acronym for personal protective equipment in the clinical and health worker space. This involves a number of different things that are going to give the healthcare professionals or essential workers (some essential workers require these things as well – they might not be healthcare professionals, but they’re essential). It provides them protection against the infection or the transmission of the infection and it also allows them to operate more freely when they’re dealing with patients. Typically, it involves things like masks – either surgical masks or what we call in N95 masks. N95 masks are resistant to viruses and of course Covid-19 is a virus. It involves things like gloves – gloves that you use in the surgical setting but also in the examination setting. It involves things like surgical gowns, aprons, there are covers that you wear – they’re called shoe covers – and those are the types of things that we’re looking at here. Some people will include ventilators in that – that’s not the correct place to fit ventilators in. So, PPE is just purely the garments that protect the healthcare professionals from contracting the infection.
What about the testing equipment?
So, our country has embarked (and this is a very critical element – not only in the healthcare space but also to the economic decisions that are taken pre and post lockdown) – on a mass screening and testing campaign. We currently have capacity to carry out – across the private and public sector in our country – twenty five to fifty thousand tests a day. We did run into problems initially in terms of test kits, as you can imagine; these are also rare commodities globally, because everyone started buying these test kits because everyone’s got the same strategy that we do – which is massifying the testing. Supplies have been stabilised – they’ve come into the country. We can do 25 to 30 thousand a day, but we’ve got to do this efficiently. In other words, you have to carry out your screening and testing in the right places so that you’re able to better understand where the epidemic is residing, where it’s concentrated – and that then allows you to make the right health and economic decisions.
So we’ve got two weeks to go of the lockdown (as has been announced). Is there going to be enough testing in that period to perhaps raise the lockdown completely?
I think that’s the million dollar question here because it is going to have to be a merging of the healthcare and economic modelling at a point in time and we are rapidly reaching that point – I’d say we’re about a week away from that (in my assessment). More important than having vast quantums of data is that the data that you’ve got has to be geographically representative. I’m hoping that in seven, eight days time we’re going to have that visibility because that’s the type of information that both government and business as well as labour need to understand where you start lifting and where you start relaxing the lockdown. There’s no doubt that our economy is in a very difficult space at the moment. The presidency hosted an economic summit this morning and unfortunately there’s no good news coming out of there – only bad news and it’s degrees of bad news. So I have no doubt that we are probably – as a country – edging a little closer to merging the health science and the economic realities.
There was some announcement this morning or certainly discussion this morning about airlines being closed down. As a former chairman of South African Express – have you got anything to add to that debate?
I was chairman about eleven years ago and things have changed – the picture’s changed dramatically. I think in the days that I was chairman we used to turn over an operating profit of around 250 million rand and gave a fairly good regional service to the country and the region. I must say, these days I’m very much a proponent of; first of all, the three entities – SAA, SA Express and Mango should have been merged into a single entity years ago. It was even a proposal in my time. Secondly, I think we need to be re-prioritising all the bailouts and all the CapEx – it’s really a sinkhole here – you’ve got to be prioritising to other places that agree it’s going to be applied more efficiently. We’re not getting an efficient return on these entities. They’re not critical because there are other airlines that you could use. Sentimentally, of course, and emotionally – it’s devastating, because it’s been a national brand – part of the national identity for many years. But if I look at it from a rational point of view, I think the right decision is to redirect that funding into other priority areas in the economy right now there are many of those.
Topping the list is of course Covid-19, which we have been discussing now. Are you comfortable that we are doing everything possible in this country to make sure that the international impact is going to be the least that it could be?
I can’t think of any country globally that’s getting this right, to be honest. Not even those with massive and significant resources are getting it right, because it’s just something that’s completely blindsided the world and, with all the good planning that you can possibly ever have, you’re going to have blindsiding and it’s going to continue. We have been blindsided around the globe – our health response has been a very effective one in my opinion. The strategy is correct, the execution of it has been fairly good. I think parts that we’re probably not doing as well in are some of the social security aspects and we are not doing well because of a combination of things. Firstly, we don’t have the fiscal space or wriggle room to do what, for example – it’s very different when you’re sitting in the US and you can throw $2trn at this. We just don’t have that money at all. And I am concerned that the social security net is not what it ought to be and we are starting to see manifestations of this. We, of course, as business – do dynamic risk assessments and that is probably the biggest risk right now. And one has got to get a perspective on this. Of course, there’s going to be mortality and a stress on health resources. You shouldn’t lose sight of the poverty levels that exist in the country. I don’t think it would be wrong if I say that; if you look in 12 or 18 months time in the top 10 mortalities – you won’t find Covid-19, but you’ll find the usual poverty related diseases like HIV and malnutrition etc. So the short answer to your question is that from a health strategy point of view – I think Minister Mkhize and his team have done well. The execution has been fairly good under constrained circumstances, but our social security response could have been better, I believe.
How do you see this all playing out from here?
I’m seeing this in three phases and I know that when the clinical experts presented the other evening they had it in eight phases or stages. I’m seeing this in three phases. Firstly, phase one is the current lockdown phase that we’re in – and that’s very much a consolidation and preparedness phase. Phase two is going to be the gradual relaxation or lifting of the lockdown and dealing with the economic realities. And then, the third phase is restructuring and rebuilding the economy. So, those are the distinct phases I’m seeing. The end of phase one will be when you’ve had part of the gradual lockdown lifted and you’re starting to see some sparking in the curve. And then, you’re going to move very much into ‘how do you manage economic realities and the burden that’s going to be placed on tertiary healthcare facilities in particular. So, that’s how I’m seeing it – what’s important in all three of those phases is planning and the interconnectivity of these three. We know that there’s going to be hundreds of thousands of jobs shed – it’s not going to be pleasant. And you’re going to have to restart the economy – and I think every generation at some point in time goes through this; whether it’s a generation that had to recover from the Second World War or the one that had to recover from the Great Depression or you could even say a post apartheid economy in South Africa. Every generation goes through these difficulties. The important thing is how you respond and how you recover from those difficulties, and I think that’s where we need to get the national mindset geared at. Right now, I’m detecting a lot of dejection, because I think the economic realities (sort of three weeks in) – they’re starting to bite and people are starting to get an air of desperation. And I think we need to channel that into changing the national mindset to one saying, ‘this is the recovery and the recovery is going to be determined only by how well we restructure the economy’. The economy’s been due for restructuring anyway – there are significant structural reforms that are required. And maybe that’s the little silver lining we can take out of this. We haven’t had the courage to restructure. Maybe this is the time now – driven by an air of desperation.
Mr Nicolaou, where are we in those three phases?
We are edging towards the end of phase one – which is this containment lock down phase, and I think as soon as you start seeing a gradual relaxation of that and – like the clinical experts said the other evening – you’re going to have a spike in the curve. There’s absolutely no doubt – it’s unavoidable. This has really bought us time and a slight protraction of phase one has bought us time to better gear up for what’s going to come in the tertiary facilities, the healthcare facilities – but it’s also allowed us to build up more data – the data set is going to be better. And if you’ve got a better data set you can make better decisions. So, that’s really been the purpose of this first phase and the lockdown and it’s, unfortunately – towards the end of it – bringing the economic realities home to roost.
