Informal economy will be hammered but could prove to be resilient in Covid-19 lockdown – GG Alcock

The impact of the 21-day shutdown has had a devastating impact on economies worldwide and for South Africa it has come as a double-whammy as years of corruption has left the country with serious financial troubles with Moody’s downgrading the country to junk status over the weekend. Although help has been promised; many businesses are not sure whether they can survive this sharp downturn. For the informal sector; the decrease in footfall as people are confined to their homes is going to have a serious impact. Informal sector expert GG Alcock, who coined the phrase ‘Kasinomics’ to describe this economy, says “Taverns and hair salons will be hammered” and the backroom rental economy estimated by Alcock to be worth about R20bn in income, “will feel the impact from the end of April.” It is also unlikely that this sector will get much help from the Government. But Alcock says the sector is resilient and he believes they will be able to “batten down the hatches.” – Linda van Tilburg