Growing Incidences of Omicron across the world, particularly in Southern Africa-with more cases in South Africa, are sending jitters at a time when everyone thought the pandemic is bottoming out. Stock markets have crashed; oil prices dropped and tailwinds of another gloomy global economic trajectory are predicted. It was a triple whammy for South Africa, which refuses to come out of the impact of the financial meltdown of 2009.
South Africa’s economy has been grounded for more than a decade. In 2019, the real GDP growth of the country was around 0.2%. Weighed down by the pandemic and the consequent containment measures, the economy contracted by 7% in 2020, according to the World Bank estimates. In fact, South Africa has been the worst affected country in the continent both in terms of total reported Covid-19 cases and deaths. The country reported nearly 3 million cases and more than 89,000 deaths since the start of the pandemic.
South Africa officially exited its severe third wave of coronavirus infections in end September. As the restrictions eased, the economy slowly started limping back. The global recovery also helped South Africa, especially the strong performance by China and the United States, two of its main trading partners. As the world started reopening, the tourism sector, a key contributor to South Africa’s GDP was upbeat and started gearing up for its peak tourist season of x mas New year.
Things were looking up until last week when the new highly transmissible variant of COVID-19, omicron, was first identified in South Africa. The lightning speed of the spread of Omicron across the country, the high number of mutations and vaccine-resistant strains and transmissibility made scientists worried. It could take weeks for them to fully fathom the impact of the variant’s mutations. But the worry is that there may be a large influx of patients needing intensive care, outstripping South Africa’s hospitals and health care facilities.
Almost 65% of the population in South Africa are not vaccinated and the rest are only half-vaccinated. Vaccine hesitancy and apathy have hindered the vaccination campaign. Within two weeks, the Omicron variant sent South Africa from a period of low transmission to a spiraling number of infections, particularly among young South Africans. The rapid spread of Omicron in South Africa and the demographic profile of the patients led to a global scare. Even more alarming was the global reaction to the new variant found in South Africa. Many countries including, UK, Germany, US, etc panicked and reacted by imposing a travel ban on South Africa and its neighbors in the region.
Such a decision by other countries will be a severe blow to the South African economy, particularly tourism. The repercussions are already evident. Rand slumped by 2% against the dollar, and South African hospitality stocks plummeted as investors were unnerved. A statement by the South African foreign ministry strongly condemned the travel ban and pointed out that the bans were “akin to punishing South Africa for its advanced genomic sequencing and the ability to detect new variants quicker”.
South African Health Minister Joe Phaahla reacted by saying that isolating South Africa was against the norms and standards of the World Health Organization (WHO). Instead, the need of the hour is a global response. Some experts have cited that the Delta variant spread to 53 countries within three weeks of being identified. Therefore instead of closing borders, what is needed is to find solutions to this variant together. This virus can mutate in the absence of adequate levels of vaccination. Therefore, it is critical to collaborate to get unvaccinated people vaccinated.
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