Johannesburg - Major enterprises and businesses in South Africa have had to close shop or significantly downsize operations, with resultant massive job losses during the prolonged Covid-19 pandemic characterised by protracted lockdown periods.
The significantly rising rate of unemployment in South Africa threatens the expected economic rebound this year after it worsened to a new record high in the second quarter of 2021 due to more than 500 days of the national lockdown.
Data from Statistics South Africa (Stats SA) released in August showed that the jobless rate increased by 1.8 percentage points to 34.4% in the second quarter, from to 32.6% in the first quarter.
This is the highest unemployment rate recorded since the start of the Quarterly Labour Force Survey (QLFS) in 2008.
However, for some businesses, the pandemic and economic meltdown have presented an opportunity to pivot their operations accordingly, in a bid to shed the impact of the unprecedented scourge and to keep their doors open.
James Matshubeng, the managing director of Midrand-based ICT consultancy firm Matoto Technologies, said considerable adjustments had to be made, and unfortunately some employees had lost their jobs.
“Covid-19 has been brutal to society, never mind business. One of the difficult adjustments we had to make was to let go of some employees, as their roles became obsolete due to clients working remotely and at home,” said Matshubeng.
To save the ship, and to maintain their relationship with existing clients, Matshubeng said the adjustments were made to service offerings and emphasising value for money by utilising software and applications that clients were already paying for. This sacrifice came as numerous clients expressed difficulty in staying afloat, and many wanted to cancel existing contracts.
“The biggest challenge the pandemic presented was that there were fewer human interactions, and because of that entrepreneurs were forced to rethink the impact the new normal would have on business operations, employees and clients. Tough decisions had to be made, and time was not on anyone's side. We understood this and although we were under pressure, we believe we did the best we could for the business,” said Matshubeng.
“Although the pandemic brought unfavourable conditions in a noticeably short space of time, for entrepreneurs it was a wake-up call because it realigned us with the core foundations of entrepreneurship. What distinguishes us is our exclusive partnerships with software giants like Nagios and Druva, where we are the only African distributor.”
For Matshubeng, survival through the Covid-19 pandemic meant going back to the drawing board and having his team radically transform how they did business.
“The ability to dig deep and utilise one’s entrepreneurial acumen has been the difference for many. I think such competencies allowed some entrepreneurs to not only survive, but to thrive during the pandemic,” he said.
“Entrepreneurs do not receive much support in South Africa, and we have had to do it on our own. But many of us are continuing the journey and trying to build our businesses again. We call on the government to do something to assist businesses, especially those that are specialised like ours.”
Matoto Technologies, which has been in operation for 13 years, is a 100% black-owned information and communications technology solutions provider.
Johannesburg-based ICT journalist John Arufandika said that while Covid-19 had had a negative impact on traditional information and technology companies, particularly entities in networking and hardware supply, there had been a significant positive impact on fintech companies, online integrators and online store developers.
“There has been a notable shift by brick and mortar companies towards digitalisation in their service offerings. This has impacted heavily on staff levels being reduced by these companies as they look for digital products. On a positive note, fintech companies, payment gateways and software development companies have seen a positive increase in their revenue and are also employing more engineers,” said Arufandika.
“Also benefiting from the pandemic are data companies that have seen an increase in the amount of data being consumed, and this has also benefited consumers in terms of speed and pricing, as more fibre companies are now in price wars.”