“The measures are too stringent and could bleed the economy to death.”
Although some economic activities were resumed under level 4 of the lockdown, this was not enough to save jobs and put food on the table.
This was the view of Debt Rescue CEO Neil Roets.
Level 4 has seen some businesses such as the clothing industry, factories and others re-open, while many still remain closed.
Roets said this change was not enough and more businesses should be re-opened.
He cautioned that the longer the lockdown continued, more businesses would close down and more people would lose their jobs.
“The changes [between lockdown levels] make a difference, but it’s still not enough. Although some shops are open, people are not buying anything because some people are close to losing their jobs as the businesses they work for are still closed.
Although some economic activities were resumed under level 4 of the lockdown, this was not enough to save jobs and put food on the table.
This was the view of Debt Rescue CEO Neil Roets.
Level 4 has seen some businesses such as the clothing industry, factories and others re-open, while many still remain closed.
Roets said this change was not enough and more businesses should be re-opened.
He cautioned that the longer the lockdown continued, more businesses would close down and more people would lose their jobs.
“The changes [between lockdown levels] make a difference, but it’s still not enough. Although some shops are open, people are not buying anything because some people are close to losing their jobs as the businesses they work for are still closed.
“The levels are too stringent and it might see the economy bleed to death. More businesses must re-open while practising health measures.”
Roets also said that the government, by keeping the public in the dark on how long level 4 would last, made many too people reluctant to spend any money as no one knows when the level will end.
“There are many businesses that do not qualify for government grants. Many of them will close down the longer level 4 lasts,” he said.
He added that the longer the clamp on the economy was kept, it will see the country’s economic recovery journey taking longer than expected.
Roets said the debt forgiveness or payment holidays offered will not be meaningful for many people who needed debt relief.
He advised consumers to use whatever spare cash they had to pay off high-interest-bearing loans as well as credit and store cards.
Roets said almost half of all consumers were three months or more behind in their repayments.
“We can see clearly from the spiralling number of applications from consumers who want to be placed under debt review pouring into our offices just how dire the situation has become.
“We fully understand and agree that social distancing has to be maintained and even tightened to save lives; however, there is no sugar-coating the fact that consumers are heading for disaster.”
Roets said any hopes of additional financial assistance from either the state or the private sector was a “long shot”.
“Aside from the relief offered by the Unemployment Insurance Fund (UIF) to workers who have not been paid or not been paid in full, there are no such packages in the pipeline.
“At the most, financial institutions may give consumers in good standing a longer payment period in which to settle their debts,” Roets said.
“We are lucky in one respect: we have some of the most progressive legislation in the world to help consumers recover from this disaster.”
Many economic experts have joined the call for the economy to re-open to let most businesses operate under strict health conditions.
This comes as the DA has called for more re-opening of the economy, which the ANC caucus responded to as being “premature”.
