Small businesses’ urgent plea: ‘Pay us what is due to us so we can survive’
CAPE TOWN – Covid-19 and the economic downturn has and will continue to have a devastating impact on small businesses throughout South Africa.
National Small Business Chamber (NSBC) founder and chief executive, Mike Anderson said on Tuesday that getting big businesses in South Africa and the government to pay their small business suppliers on time was one of the biggest challenges they faced and if the problem persists too long, it could ultimately shut down a small business.
“More than ever before, now is the time to ensure that all your small business suppliers are paid quickly. We are urging Big Business South Africa and Government to release these all important payments now,” was the urgent plea from Anderson.
He said small businesses needed to pay their workers, their rent, suppliers and other key operating expenses, and survive as a family. What they small businesses needed right now – or at any time in fact – was the additional burden of not receiving payment on outstanding invoices. “We have limited control over how long the pandemic will disrupt our nation, but we are in control how quickly we can pay our small business suppliers.”
Anderson said the findings of the recent Covid-19 National Small Business Survey clearly indicated that late payments were at an all-time high as small businesses were waiting too long to get paid.
The average amount owed to each small business is now at its highest level.
“We see small businesses going out of business every day, in many cases due to cash flow as a result of late or non-payment. We all have a collective responsibility to do whatever we can to keep small businesses in business and their workers employed,” said Anderson.
Head of policy research at the Institute of Race Relations (IRR) Dr Anthea Jeffery on Tuesday warned that catastrophic consequences still loomed for millions of South Africans, who could yet lose their jobs and homes, exhaust their savings, and go bankrupt under mountains of debt.
She said: “With the formal economy still operating at a fraction of its normal capacity, tens of thousands of small and micro businesses could also collapse before long. Many would have little or no prospect of ever coming back.”
The IRR has argued in its submission to the government on the national response to the Covid-19 crisis that mounting hunger, hardship and economic decline underscored the necessity of South Africa’s lifting the current lockdown.
Jeffery noted that estimates of the economic cost of the current lockdown ranged from R13 billion to R20 billion a day. Given that the economy – after decades of mismanagement, poor policy, and corruption – was on its knees even before the lockdown began, it ‘simply cannot cope with this enormous further blow’.