Market trends and other economic data confirm that the coronavirus disease (Covid-19) pandemic now posed “a clear and present danger” to the South African economy, the North West University Business School’s Professor Raymond Parsons said in a statement.

According to Parsons, the ripple effects from the economic dislocation elsewhere and the immense volatility in financial markets had already reached South African shores, aggravated by the risk of widespread contamination from Covid-19 in the country.

However, he indicated that skilful risk management and anticipation would be required if the risk of the virus was to be controlled.

South Africa’s initial steps taken so far by the Ministry of Health were “positive”, he noted, but warned that, in order to minimise “the looming overall impact” of Covid-19, cooperation between the public and private sectors would be critical in the implementation of appropriate health and economic measures.

Therefore, Parsons warned that South Africa “needs to strategise carefully” in terms of the way forward, considering that, currently, South Africa “is simply not well placed economically to absorb the bad news and extra burden arising if Covid-19 should spread widely”.

Parsons’ commentary falls in line with President Cyril Ramaphosa’s recent address on the virus, in which he officially declared a “national state of disaster” in efforts to limit the threat of the virus to citizens, society and the economy.

During his address, the President indicated that government’s priority would be to safeguard the health and wellbeing of all South Africans, while simultaneously addressing the economic fallout.

He warned that South Africa should expect a decline in exports, a drop in tourist arrivals and a “severe impact” on production, business viability and job creation and retention.

In response to Covid-19’s arrival on South Africa’s shores, Cabinet is in the process of finalising a comprehensive package of interventions to mitigate the expected impact of the virus on the economy. This is being done in consultation with business, labour and other relevant institutions.

Since the outbreak was first reported, government has responded by putting screening and containment measures in place, and the national response has been driven by an Inter-Ministerial Committee (IMC) chaired by Health Minister Dr Zweli Mkhize.

The manner in which the IMC and the support teams responded to this emergency was both exemplary and reassuring, particularly in helping to quell public panic, Ramaphosa said, adding that he would chair a National Command Council to coordinate all aspects of the national response.

The President also announced that a raft of emergency measures had been put in place, and included, among others, travel bans, mandatory testing, self-isolation or quarantine, strengthening of surveillance, screening and testing at ports of entry.

Ramaphosa also encouraged social distancing, emphasising that this was “critical” in efforts to contain the spread of Covid-19.

Gatherings of more than 100 people are prohibited and mass celebrations of national days have been cancelled, while a total of 35 land ports and two sea ports will be closed, as were schools from March 18 until after the Easter weekend.

However, considering that small businesses in South Africa are in “a perpetual state of disaster planning”, the Small Business Insitute (SBI) has called on government and big business to consider emergency assistance to small and medium-sized enterprises (SMEs).

SBI CEO John Dludlu said small businesses made up 98.5% of the firms in the country and that the country was reliant on them “to make a dent in unimaginable unemployment levels”.

He stressed that, without SMEs, which were already “extremely vulnerable”, South Africa had “no hope of inclusive economic growth”.

“We therefore call on government and big businesses to consider how they can assist SMEs in the event the coronavirus hits South Africa, causing customers to stay home, and resulting in employees requiring paid leave and supply lines being disrupted.”

Among the establishment of various emergency loan schemes, Dludlu also suggested that government consider lifting tax thresholds for SMEs, offering tax-free grants, and assisting businesses to protect their employees and customers from the possibility of contracting the virus by making widespread public service announcements.

Businesses could offer discounted data and cloud services for virtual business meetings, planning and execution.

Business Leadership South Africa (BLSA) CEO Busi Mavuso, meanwhile, in a recent weekly letter, commented that the President’s measures “were as dramatic as they were necessary”, and therefore welcomed the “decisive leadership” from the President.

While the measures were going “to be a shock” to the South African economy, she indicated that “many of [the country’s] trading partners have been severely affected”.

To reduce the economic impact as much as possible, BLSA has urged the President to announce a stimulus package for the country to “confront the virus aggressively”.

Additionally, Mavuso noted that the President “can and must” instead focus on the structural reforms that the economy urgently needed.