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One in five SA businesses laying off staff due to impact of Covid-19

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Some businesses indicated they could only survive less than a month without revenue.

Cape Town – The economic devastation brought

on by the coronavirus pandemic and

the ensuing national lockdown has

seen one in five businesses in the

country laying off staff and a third

of businesses working reduced hours.

A special survey carried out by Statistics SA on the business impact of the pandemic in South Africa also found that 30.6% of the polled businesses said they could only survive less than a month without revenue, while a further 50% said they could survive between one to three months without revenue.

Absa economist Peter Worthington said: “The results of this survey are broadly consistent with our view that economic recovery from the effects of the lockdown is likely to be slow due to some permanent damage to the productive capacity of the economy which will inevitably come with job losses.”

A total of 85.4% of respondents in the survey reported turnover below the normal range over the period, 36.8% expected to reduce their workforce after the lockdown, while 50.4% anticipated unchanged job numbers.

Finance and Economic Opportunities MEC David Maynier said: “It is critical that where we can get people back to work, we do so as soon as possible to ensure that livelihoods are maintained and that we can start to rebuild our economy.

“We will continue to motivate that where businesses in the Western Cape are able to operate safely, they can do so, and so I have written to the Minister of Trade and Industry, Ebrahim Patel, to request him to convene an urgent meeting of the ministers and members of executive councils to discuss the implementation of the risk-adjusted approach to the lockdown and the proposed level 4 restrictions in the provinces,” said Maynier.

A total of 707 businesses across the country responded to the survey, conducted from March 30 to April 13, which outlined the pandemic’s impact on turnover, trading, the workforce, imports and exports, purchases, prices and business survival.

StatsSA media relations officer Felicia Sithole said: “Micro businesses (with an annual turnover below R2million) were not included in the survey, results are based on the perceptions of respondents, and interpretation is based on limited responses.”

Co-founder and chief executive at Silulo Ulutho Technologies Luvuyo Rani said: “I believe this crisis will result in many new businesses being formed. It will open opportunities which entrepreneurs can seize.

“I see there is a future online, where education will be much more affordable and accessible.

“I also see e-commerce becoming something that can be done in Khayelitsha or Philippi, or from anywhere where you can start a business, run and grow it,” said Rani.

Looking ahead to the easing of the lockdown and gradual return to business, SA Chamber of Commerce and Industry chief executive Alan Mukoki said: “It is critical that we proceed to reactivate the economy – only, with enhanced mitigation measures against the spread of Covid-19.

‘What we should avoid is a situation that we are at level 4 and working towards level 3 and below, and we then have to quickly regress back to level 5 due to a deteriorating Covid-19 pandemic situation,” said Mukoki.

FNB chief executive Jacques Celliers said: “The government’s R200billion Covid-19 loan scheme to enable commercial banks to help businesses that are unable to meet their financial obligations during the lockdown will allow many to optimise their operations to potentially withstand the current economic pressure and retain jobs, thus ensuring their resilience for when the economy reopens.”

@MwangiGithahu

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Cape Argus