An urgent review of the restrictions on the private sector construction is required if we are to avoid a collapse of the construction sector in South Africa.
And so on May 19, I wrote a letter to Cooperative Governance and Traditional Affairs Minister Nkosazana Dlamini Zuma with an attached submission requesting that under alert level 4 restrictions, construction be allowed to expand operations beyond public sector engineering and construction to include commercial, industrial and private residential construction, with construction by public entities.
Also to permit the upscaling of manufacturing of construction supplies beyond 50% sector-employment. These proposals incorporate aspects of the draft alert level 3 and 2 provisions – all of which we believe can safely be implemented immediately.
It is estimated the impact on the construction sector of the Covid-19 pandemic could cost the Western Cape 111416 direct and indirect jobs in 2020, and a loss of R14.9billion in income to people who are employed in this sector.
By opening up private construction as soon as possible, which we believe can safely be done under alert level 4, would help prevent these job losses.
The construction sector is a vital component of the South African economy. In 2019, the sector was valued at R172bn in South Africa, and contributed about R32bn to the Western Cape’s total gross value added.
The construction sector was already under pressure pre-Covid 19, having contracted by 3.3% in real terms in 2019. It is estimated that in the Western Cape the sector could experience a further contraction of about 41% this year, followed by a 10% contraction in 2021 as a result of the current restrictions.
This translates into a loss of R12.9bn in 2020 and R3bn in 2021.
Importantly, the construction sector plays a crucial role in attracting fixed-capital investment to South Africa that not only supports current economic growth, but is also a catalyst for future economic growth and economic potential.
By revising the current alert level 4 restrictions, we can help to ensure that the construction sector survives and is able to play a role in our economic recovery post-Covid-19.
Now more than ever, businesses need to be able to continue to trade safely and responsibly to ensure that we save jobs, livelihoods and the economy during the Covid-19 crisis.
The private sector construction presents an opportunity for just that.
Under normal circumstances, the sector already complies with very high health and safety standards and as such, the implementation and regulation of additional measures to ensure safe operations to stop the spread of Covid-19 would not be difficult for companies.
If the construction sector is able to operate safely for the purposes of public sector engineering and construction, we see no reason why this can’t be extended to the entire construction sector.
In doing so, we can significantly impact the ability for the economy to open in the Western Cape and South Africa in order to save jobs and get more people working safely during the Covid-19 pandemic.
* David Maynier is finance and economic opportunities MEC.
** The views expressed here are not necessarily those of Independent Media.
By David Maynier