June 2021 - AMA African Maritime Academy

Month: June 2021

COVID-19 effects on South Africa's Maritime Economy

South Africa’s Maritime Economy also get impact due to the COVID-19. The lockdown becomes the major cause of its fall, especially on global shipping.

The demand for global shipping drops mainly from the China market. These drops present an impact on the various markets, from container ships to oil tankers. This issue brings a drop in oil prices and shares the negative effect for both the offshore and onshore oil and gas industry.

COVID-19 effects on South Africa's Maritime Economy

COVID-19 effects on South Africa’s Maritime Economy

  • South Africa responds to COVID-19.

South Africa is one of the nations that take lockdown as one of their policies. The government announced a 21 days lockdown that starts on March 27 and continues at the end of April.

This closure responds to many aspects, including South Africa’s Maritime Economy. The lockdown blocks cruise ships docking as well as crew changes on South Africa’s seaports. Of course, tourism became the first place that fell under this restriction.

Although all of the nation’s seaports remain open, global shipping markets should follow COVID-19 protocols. If there are goods that come in, especially from high-risk countries, it should be sanitized first. This protocol made the seaports’ terminal adjust their services and operations.

Moreover, they should lessen the transportation of nonessential cargo and solely handle important break bulk containers and goods. The policy includes the closing of seaport terminals at Port Elizabeth, Saldanha, East London, and Maydon Wharf in Durban.

The lockdown brings the shipping market demand to fall at South Africa port. The distribution, including warehousing activities, are changing. The port operation is estimated at around 60 percent volume during the lockdown period.

COVID-19 causes the on-demand market decline. It presents us with South Africa’s economic growth increasing 1 percent in 2021 and 1.6 percent in 2022.

This pandemic brings a wide effect on South Africa’s Maritime Economy. The reason is because China is the biggest trading partner for South Africa. So, the nation is presented to any disturbance in export and import activities from China.

COVID-19 effects on South Africa's Maritime Economy

COVID-19 effects on South Africa’s Maritime Economy

  • Sector and policy response. 

As this pandemic shares a global impact, it requires a global response to find the solution. So far, the global public health gives a strong outcome to COVID-19 led by each respective government.

The South Africa government tries multiple ways to lessen the economic impact. They take decisions in various fiscal and monetary policy measures.

This policy includes increasing liquidity in the domestic market. So, it helps to stimulate credit demand. Besides, it can improve fiscal reprioritization to social security measures.

Meanwhile, from the sector perspective, the main concern is the restriction on crew changes at seaports. The government should make sector representation to ease this restriction. Yet, the government should coordinate the representation to avoid overlapping or duplication.

Any decision on it may bounce back due to social distancing and social interaction limitations. It will not affect the seafarer crew members stranded at sea or onshore. It should consider the crew members who are at work to give them time to return home.