What level 4 lock-down means for SA’s economy

South Africa's economy is facing a crucial juncture as it navigates the aftermath of the COVID-19 lockdown. Economist Mike Schussler shed light on the implications of the move from level 5 to level 4 lock-down on economic activity. With the economy slowly reopening, there has been a modest uptick in retail transactions, with a 20% increase noted in point of sale data. However, the overall impact on GDP remains dire, with Schussler cautioning that the country is still facing a 'desperate situation'. The reluctance of some businesses to reopen and the continued closure of revenue-generating sectors such as excise duties on cigarettes and alcohol paints a grim picture for the government's finances. The inability to collect these taxes has resulted in significant revenue losses, exacerbating the already precarious fiscal deficit. In the midst of this economic turmoil, the debate surrounding the speed of reopening the economy intensifies, with Schussler advocating for a faster approach to avert further job losses and prolonged economic distress. The delicate balance between saving lives from COVID-19 and preserving livelihoods hangs in the balance, as the government grapples with the urgency of jumpstarting the economy while managing the health risks posed by the pandemic. The critical role of revenue generation through taxes, particularly from sectors like cigarettes, emerges as a key factor in stabilizing the country's finances and mitigating the economic fallout of the lockdown. Schussler's insights underscore the need for strategic measures to stimulate economic recovery and prevent long-term damage to South Africa's economy.