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SA companies ask for lockdown regulations to be adjusted

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South African companies have warned that they may lose their businesses after suffering unrecoverable costs.

JOHANNESBURG – South African companies have warned that they may lose their businesses after suffering unrecoverable costs if some adjustment on lockdown regulations was not considered.

The SA Chamber of Commerce and Industry (Sacci) said today that sales volumes and new orders received were notably hard hit and driven to the negative territory in March after the government imposed a five week nationwide lockdown ending 30 April to curb the spread of the coronavirus (Covid-19). 

Sacci said the Covid-19 pandemic and recessionary economic conditions have impacted the business climate negatively and resulting in further uncertain trade conditions.

The organisation, which boasts around 20 000 small, medium and large enterprises across all economic sectors, said sales expectations and expected new orders for the next six months also took quite a blow in the March trade survey. 

“According to respondents the National Lockdown is creating unrecoverable costs and may incur further financial losses due to further compromised trade conditions,” Sacci said in a statement. 

“Covid-19 had a worsening effect on an already depressed trade environment and caused serious disruptions for the supply and offset chains – notably the consequence for expectations. 

Sacci said expected supplier deliveries and inventories were also expected to deteriorate over the next six months. 

“Respondents fear loss of business with a noticeable impact on job losses if some adjustment on lockdown regulations is not considered,” it said. 

“The effects of covid-19 are expected to remain with the trade environment for the whole of 2020.”

Sacci last week urged government and President Cyril Ramaphosa to reopen the fast food outlets with strict regulations.

Alan Mukoki, Sacci’s chief executive, said the fast food sector could be handled in a way that was safe to the public by not allowing long queues but rather limited drive through and delivery operations. 

The SA Reserve Bank last week warned that the effects of the Covid-19 would result in about 370 000 job losses in the formal sector and 1 600 small businesses going insolvent.

BUSINESS REPORT