At the height of his battle against the Zuptas, former finance minister Pravin Gordhan urged South Africans to “join the dots” on State Capture. At an FT conference in London a year ago, Gordhan’s long-time ally, SA president Cyril Ramaphosa, did his own calculations and publicly put the pillage at “almost a trillion rand”. Now the data is in, CR’s advisors are sure to sober up when they realise the Covid-19 lockdown bill is not far off the cost of that industrial scale plunder.
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At Discovery Health’s Covid-19 update last week, chief actuary Emile Stipp did some dot-joining of his own by working backwards from SA’s excess deaths and the global rate of coronavirus fatalities. He concluded, happily from a medical perspective, that the early and hard lockdown saved 16,000 lives by delaying the spread of the virus. This gave SA’s healthcare system time to prepare for the expected wave of infections and also helped local doctors apply treatments that had worked elsewhere, thus improving survival rates.
But at what cost? As the long-term impact on businesses and employment takes months to emerge, we’ll only be able to quantify the actual number in time. But we do already know from Stats SA that second quarter GDP fell 51%, which translates into a R750-billion wipeout. Divide that by those 16,000 lives, and simple arithmetic gives us a cost of R46-million for each grateful citizen saved.
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As Covid-19 targets the elderly (and sick), most of the survivors are unfortunately past their economically productive years – the rational point made during my interview in May with SA’s only Nobel Prize science laureate, 73-year old Michael Levitt (pic below). The Stanford Prof called blanket lockdowns like SA’s “a huge mistake”. Viewed from a perspective of the national allocation of resources, his argument is hard to counter.
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