Mining

Mines must assess their risk exposure to export markets. The globe’s major economies will go through stages of recession and slow growth, reducing their demand for imported resources. Forced retrenchments may spark civil unrest and strain relationships with unions and local communities. One mitigation strategy is to look at local beneficiation – creating refinery facilities and other services that keep more of the resource life cycle in the country.

Manufacturing

Manufacturing should be wary of reduced demand for their products abroad. They should anticipate significant continued supply chain interruption, particularly those manufacturers that are close to the mining industry. Manufacturers should look towards manufacturing more for local markets and work with their value chains to grow those markets.

Transport and logistics

The reduction in mining, manufacturing, retail and export activities will have a negative effect on transport and logistics. It will have more capacity than there will be demand. As with previous mitigations, the damage can be reduced by focusing more on business models that produce for local markets and domestic consumption.

Retail

Retailers will be under pressure from rent payments as well as lower consumer spending capacity. They are also being hurt by the slower exports from China – a problem already raised in March during the early stages of the pandemic. Though certain items, such as food, have good local supplies, imports from China account for up to 60% of items such as textiles and clothing. Retailers should consider major restructuring to make their businesses leaner. They must assess their exposure to markets such as China, and cultivate alternative suppliers. This is an opportunity to grow support for local producers. Retailers should also look to expand variable store hours to accommodate any future disruptions through social distancing and lockdowns.

Landlords

An added consideration should go to landlords. Rent payments are a looming problem, both on the level of individuals as well as companies. Several major retail chains have already mulled or declared no rent payments until trade resumes, with the intention to negotiate with landlords. Landlords need to prepare for this disruption and how their actions can help revive the economy. Plans must be drawn to help landlords mitigate losses and maintain their own solvency. Overall, it is important to sustain property as an investment class. Historically resilient, property can act as a safe harbour and offer a vehicle for investors to stay in the country.

Tourism and hospitality

The pandemic has brought most significant travel activities to a halt, in particular affecting tourism sectors. Hotels and similar businesses were among the first and hardest hit by the pandemic and subsequent social distancing/lockdown activities. At this stage, it is not possible to predict the future of businesses in this sector, and they should assume the worst. They must assess their risks and review their operational models. One near-term source of relief can be to offer hotel facilities as quarantine sites and charge the state to cover operational costs.

Education

Millions of students are currently stuck in their academic year. This is particularly worrying for higher-education students, where delays can incur heavy costs and social penalties. The academic year should not be disrupted. Mitigations include fast-tracking online learning – the state must help rural communities establish the appropriate connectivity and access to devices.

Finance

The financial services sector is in a very precarious position, faced at the same time with a lagging economy, growing unemployment and large-scale debt defaults. Payment holidays have been introduced, but it remains to been seen how sustainable these are. Financial institutions must consider the prospect of longer payment holidays – one mitigating action is to focus such payment holidays on low-income debtors for longer periods such as eight months. They must also consider that some debts will have to be written off.

Municipalities

Municipalities have found their already-meagre resources challenged by demands to meet the pandemic. This is a wake-up call to review municipal finances and address debts concerns urgently. Municipalities will need to engineer fiscal breathing room as they will work alongside the state to support citizens during the pandemic and its fallout. One mitigation is to consider suspending utility bills for short periods.

Telecommunications

The telecommunications industry is arguably one of the least affected by the pandemic. Such companies have benefited from social distancing and remote working. But this means these companies are also well-positioned to make greater contributions towards undoing the damage of the pandemic. One positive action would be to give all citizens free data. Assist industry sectors in distress with the modernisation of their technology infrastructure.

Treasury

The National Treasury is under incredible pressure to mitigate the broader and longer-term impact of the pandemic, as well as create short-term interventions to save the economy. Despite protests against the idea, it is inevitable that the Treasury will have to borrow from institutions such as the BRICS Bank, IMF and World Bank. It will need those funds to create a stimulus for municipalities and state-owned enterprises. It can also spearhead the development of online trading platforms that can link local supply chains and encourage more domestic trade. This will align with mitigations for sectors such as mining, manufacturing, retail and logistics.

Medical

The damage of the pandemic on the medical sector remains to be seen. The pandemic is placing severe pressure on medical resources and people. It also exposes shortcomings in the healthcare systems. The post-pandemic period is an opportunity to soberly assess and improve the sector’s readiness to anticipate and respond to major outbreaks like the COVID-19 pandemic. When taken in the context of other technology-enabled remote activities, such as online studying, the same investments in connectivity and technology can be used to improve services such as telemedicine and centralised online patient management system.