Abstract:
PURPOSE : This paper provides a critical analysis of the South African government's response to the COVID-19 crisis and its effect on state finances and budgets. DESIGN/METHODOLOGY/APPROACH : The paper critically analyses publicly available data. FINDINGS : The South African government's initial health response was praised by the international community, given the early lockdown and extensive testing regime. The lockdown devastated an already precarious economy, which led to negative social consequences. The initial lockdown delayed the epidemic, but subsequently, the infection rate climbed, requiring new restrictions, suggesting further economic disruption. The government has had to increase its borrowings, while the future tax take is forecast to be significantly reduced, a combination which will lead to a severely constrained public purse for many years to come. This will limit the government's ability to address the basic social needs that predated the COVID-19 crisis. ORIGINALITY/VALUE : This is one of the first academic papers to critically assess the effect of the South African government's response to the COVID-19 crisis on state finances and budgets.
