President Cyril Ramaphosa has announced a return to level 3 of the lockdown saying that the country is at an “extremely dangerous” point in its fight against the pandemic and this required immediate and decisive action.

The new measures, which include the strengthening of level 3 restrictions, will take effect from midnight on Monday and last until January 15. They will include the prohibition of all indoor and outdoor gatherings except for funerals and other limited exceptions. After 14 days this prohibition will be reviewed.

A nationwide curfew will be in effect from 9pm to 6am apart from permitted workers. Nonessential shops, bars and restaurants must close at 8pm. Nightclubs will not be allowed to open.

It will be compulsory to wear masks in public places and failure to comply will be an offence liable to a fine or imprisonment not exceeding six months.

The sale, distribution and transportation of alcohol will be banned, including from retail and on-consumption outlets to reduce pressure on hospitals.

In a televised address to the nation on Monday Ramaphosa announced new hotspots in Gauteng, the Eastern Cape, the Western Cape, KwaZulu-Natal, the North West and Limpopo. All beaches, public parks and public swimming pools in hotspot areas will be closed from Tuesday. Ramaphosa urged that travel to hotspots be avoided.

The new measures comes in the wake of a surge in Covid-19 infections which in some areas have exceeded the peak of the first wave and have been fuelled by a new, more contagious variant of the virus.

Ramaphosa said that infections had now climbed at an “alarming and unprecedented rate” to more than 1-million cases with the total number of deaths nearing 27,000. A total of 50,000 new cases have been recorded since Christmas eve.

He condemned the failure to adhere to health protocols and the attendance of social gatherings which increased the risk of infection, especially when masks are not worn and hands not sanitised. The consumption of alcohol has contributed to this risky behaviour and has increased the number of trauma cases in hospitals which are under severe pressure and at near-full capacity in a number of provinces.

Ramaphosa’s address followed Sunday’s emergency meeting of the national coronavirus command council (NCCC) which is managing government’s response to the pandemic, and Monday’s meetings of the president’s co-ordinating council and the cabinet.

The new measures to contain the second wave will further erode profits for the alcohol and other related industries which had been in recovery phase after their 2020 prospects were whacked by the initial total ban on the alcohol trade. This saw Heineken, AB InBev, Consol and a few restaurant chains either pull off capital investment plans amounting to an estimated R13bn or defer them. The measures are also likely to affect the jobs of thousands of workers.

The Beer Association of SA, which includes the Craft Brewers Association, Heineken SA and SA Breweries said the alcohol ban — the third of its kind — will cost jobs and increase illicit sales. Its CEO Patricia Pillay said the previous two alcohol bans had a devastating effect on the beer industry, with 7,400 jobs lost and R14.2bn in lost sales revenue, while 30% of breweries had been forced to shut their doors for good.

In addition, the government lost R7.4bn in taxes and excise duties that could have been used in the fight against Covid-19. “This third ban will do untold economic damage to the beer sector and the 415,000 livelihoods it supports,” Pillay said.

The alcohol industry has been appealing for the repeat of a total ban to be avoided at all costs.

Having already provided a R500bn relief package to help cushion the effects of the first strict lockdown on businesses and workers and having suffered the effects of a further sovereign downgrade by credit ratings agencies, government does not have the fiscal room to continue to provide further support, 

The new restrictions will add a further blow to an already fragile economy which analysts say is already in a depression. The National Treasury expects the economy to contract by 7.8% in 2020 after the country shed more than 2.2-million jobs in the second quarter. The economic impact of the virus and subsequent lockdowns has cut tax revenue and pushed up SA’s fiscal debt burden to 81.8% of GDP, from 63.3% in 2019/2020.

“We don’t have the fiscal space [to cope with another hard lockdown] — that is well documented,” says Isaah Mhlanga, chief economist at Alexander Forbes. “But there are also costs associated with people falling ill and overwhelming the health system. We have to weigh the health costs of the coronavirus with the economic impact of imposing harsher restrictions. If we just close entertainment spaces the cost to society will be less than if we just let things go without any controls whatsoever.”

The rand was relatively sanguine despite the renewed restrictions. By 10.23pm, it had weakened 0.48% to R14.6316. It has gained about 5.8% since the beginning of December, helped partly by optimism about the outlook for the global economy, which has been boosted by hopes that effective vaccines will be coming on stream soon. The rand is down about 4% so far in 2020, but has recovered from a record low of R19.34/$ reached in April.