Discuss the effects of the corona-virus

pandemic on the following sectors of the

economy:
(a) Mining
(b) The informal sector
Introduction

 In 2019 governments across the world declared the coronavirus as a

pandemic, this declaration prompted many governments to implement
different measures that led to economic slowdown and in some countries
total economic shutdown
 In order to alleviate the effects of covid-19 government implemented
measures such as social distancing, suspension of cross boarder travel,
suspension of any mode of transport and immediate closure of business.
 These measures led to the weakening of economic productivity within
Botswana and the whole world in general especially those that are
dependent on the level of daily consumption of community.
Mining

 Mining is considered as the backbone of the economy of Botswana and is

a major contributor to the gross domestic product of Botswana, through
exports
 The over reliance on the mining sector not only in Botswana has seen half
of the world suffer from the impact of covid-19 in this sector.
 The restrictions put on mining activities have further crippled this sector
accelerating economic downturn
 Coronaravirus has affected this sector both positively and negatively
Mining

Positively
 Need for beneficiation and processing of materials
 Automation
Negatively
 Downsizing and closure of mines
 Emergence of informal miners
Downsizing and closure of mines

 The suspension of mining activities by governments saw major mines

downsizing and closing mines in a bid to reduce production cost
associated with salaries and wages
 Mines where also closed because of the decreased demand for some
commodities e.g. the closing of Alta-Zinc mine in Italy, leading to reduced
unemployment and loss of potential revenue to the Italian government
 Not all employees in a mine have the same status, they have different
roles according to the role of their jobs one is considered an essential
worker because they perform necessary tasks for the functioning of the
mine while others are not so much.
Emergence of informal Miners

 The closure of mines around the world has seen a rise in artisanal miners
and this has led to parallel markets where commodities are traded and the
government receives nothing from these underground practices
Need for beneficiation and processing of commodities
 Covid-19 has acted as an eye opener to government’s world over that they
are losing more in exporting raw materials and minerals in their natural
state than exporting them semi done or already processed.
Automation

 The industry is fast tracking the automation process which will see the
reduction of human involvement in mining activities for example use of
fully autonomous haul trucks.
 This will see the need for human input limited and eventually cut the cost
associated with safety and increase overall productivity of mines
 The shift from labor based to technology based operations in the mining
industry, an opportunity is emerging to enhance gender diversity in a field
dominated by men - automation is providing an access point to women to
venture into mining.
The Informal Sector

 The informal sector is an economic activity that is not taxed and is not
under any government observation.
 They are many participators within the informal sector, such as transport
providers, vendors, cross boarder traders (runners) and domestic workers.
Effects on the informal sector

 Reduced household income

 Competition
 Reduced Agricultural Productivity
 Training ground for the private sector
 Protection of the informal sector
Reduced household income

 The measures put forward by the government to suspend public

gatherings and travel to curb the spread of covid-19 has had an adverse
effect on the level of household income. This reduction has led to the
increase in poverty in most third world countries, therefore going against
many government mandates to alleviate poverty
 Formally employed individuals use the informal sector as a stream of
income, therefore these measures have led to their household income
reducing and eventually in the long-run affecting overall gross domestic
product of the nation.
Competition

 The informal sector contains little to no barriers of entry, hence anyone can
enter it at will
 The increase in informal traders has been expedited by the laying off and
retrenchment of employees by firms who have been affected by covid-19
and embraced technology, this has seen an increase in street vendors and
taxi operators, this increase has led to reduced prices and some traders
embracing technology in their small operations in-order to remain
competitive and retain customers
Reduced Agricultural Productivity

 Many farms get their unskilled labour from the informal market and this
cheap labour is mostly foreigners, who have no job security. The measure
put forward to reduce the spread of covid-19, suspension of international
travel has seen the agricultural industry hit hard since most of its labour
are informal workers and foreigners (registered and unregistered).
Training ground for the private sector
 The emergence of covid-19 has seen the informal sector adapt quicker
than formal business the different trends associated with covid-19,
therefore the informal sector is working as a training field for the untrained,
retrenched, laid off and unskilled workers, so that they gain the relevant
skills to be easily integrated into the formal sector and industry of their
choice
Cont.

 For example those who have been retrenched or laid off may pass on industry
relevant skills to those who have no work experience within the formal sector,
marketing, one may earn relevant marketing skills during the pandemic that
would have not been able to earn in the formal sector.
Protection of the informal sector
 Coronavirus has shone light on the weaknesses of the global labour market
and protection of workers, he further explains that the informal sector being
ungoverned and untaxed and not backed by contracts or institutions provides a
new economic vulnerability
 The fact that the informal sector contribute to a nations overall GDP means that
the government must try by all means to protect the participators in this sector,
coronavirus has shown that the informal sector is just as important as any other
sector and cannot be ignored.
Cont.

 In Botswana Minister Peggy Serame has already outlined the two stage
plan to revive the informal sector, where this plan aims to
1. Establishment of Informal Sector Facilitation Structures within first year of
COVID-19 pandemic. The aim of this goal is to put in place all of the
structures that made it impossible to assist the informal sector during the
lockdown
2. Economic Revitalisation of the Informal Sector- through an informal
sector agency that will recapitalize and capacitate the informal sector
 Without the presence of covid-19, the government would have
continuously turned a blind eye to the informal sector therefore
coronavirus has helped establish policies that will govern the informal
sector providing sustainanable livelihood