KZN economy in 'dire, dire straits'

By Tanya Waterworth Time of article published Jun 20, 2020

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Durban - There is a sense of desperation mixed with relief as tourism, hospitality and personal services businesses across ­KwaZulu-Natal anxiously await a date for re-opening.

A business impact assessment released this week warned that 57% of the province's SMMEs would shut their doors by September if lockdown regulations were not lifted.

Economist Mike Schussler said yesterday that 57% was a “very conservative” figure and was likely to be higher, because “some big businesses have already indicated they can't last until September”.

Schussler said that with regard to protocols being clarified around opening the tourism, hospitality and personal care services, “the government needs to act with a sense of urgency”.

“South Africa is in dire, dire straits at the moment. We are close to losing one in five jobs in the private sector,” he said, adding that coastal cities would be particularly hard hit because the tourism industry had been “decimated”.

“In KwaZulu-Natal, there are so many events at this time of year which is normally the July holidays, the lack of which will have a devastating effect on KwaZulu-Natal,” he said.

On Thursday, KZN MEC for Economic Development, Tourism and Environmental Affairs (Edtea), Nomusa Dube-Ncube, released details of the Covid-19 economic and business impact assessment report, which indicated that 57% of business would shut down within three months should regulations not be lifted.

Dube-Ncube said: “All the members of the KZN Economic Council have noted with a high level of concern the report which shows the devastating impact of Covid-19.”

The survey to compile the report was conducted by Edtea, KZN Business Chambers Council (KBCC) and UKZN Graduate School of Business and was conducted between May 15 (lockdown level 4) to June 15 (lockdown level 3).

The tourism, catering and personal services sectors made up 37% of the survey's respondents, with all these sectors being significantly affected by the lockdown.

The survey showed that during levels 5 and 4, there was a 90% decline in demand for products and services across business sectors. Temporary closure of businesses, or an impact so severe that businesses scaled down operations by more than 50%, affected 77.9% of KZN businesses during the period of the survey.

On Wednesday, President Ramaphosa announced eased regulations under advanced lockdown level 3 and included restaurants being allowed to offer sit down meals, while accredited accommodation and casinos could open, conferences and meetings could be held, and personal care services such as hairdressers would also be back in business.

But as of yesterday, there was no clarity on when this might happen or what protocols would be required.

The Federated Hospitality Association of Southern Africa (Fedhasa) national chief executive officer, Lee Zama, said the hospitality industry “needed to be opened in totality”.

“We are an industry which already has strict hygiene standards in place. The protocols are already in place for additional measures such as social distancing.

“Our industry has been the most affected, and to open the industry is a must, and it must be totally wide open. We are doing everything that must be done, and we are very comfortable that we have done what is needed when it comes to safety protocols.”

PWC (PricewaterhouseCoopers) economist Christie Viljoen said every effort was needed to retain jobs, and when a business closed, another would not necessarily take its place in such a tight economy.

“There are lots of places that won't open up again. That's the reality after being closed for a few months. But, we need to try to get these companies back on their feet and retain those jobs. The chance of getting another job is much more difficult than six months ago,” said Viljoen, adding that the latest easing of lockdown regulations was “good news”.

“The devil is in the details, and the detail will show if it's worthwhile to open again. These sectors have a forewarning and can start planning. They know that in the near terms, they will be opening up again,” he said.

The Restaurant Association of South Africa CEO Wendy Alberts confirmed yesterday afternoon that they were still waiting for guidelines.

“The industry has been completely decimated, and while we received the news of re-opening with celebration, we have to mobilise all the players to move forward. We have made it very clear that we will need to be allowed to have a 70% sit down and to be able to serve alcohol,” she said.

Resort and hotel chain First Group’s managing director, Shaun Lamont, said they were “thrilled to receive the news” that the tourism and accommodation sector would be allowed to re-open soon.

“We are not 100% clear yet as to when we will be allowed to physically open our doors and we are also eagerly awaiting final clarity on any possible travel restrictions.”

The Independent on Saturday

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