'Despite move to lockdown level 4 small businesses still face hardship'
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Cape Town - The move to lockdown Level 4 has, to an extent, eased difficulties for small businesses but the sector continues to face incredible hardship, says the Cape Chamber of Commerce and Industry.
Chamber president Geoff Jacobs said Level 5 had a hugely negative impact on the private sector by confining business owners, managers, administrators and workers to their homes. After five weeks of lockdown, it was obvious that the small business sector had taken the biggest hit.
Jacobs said the owners of many enterprises had continued to pay their workers - sometimes even forgoing their own pay - but could no longer do so, having fallen between regulatory cracks by not being deemed formal enough to qualify for aid, or through simply being unable to wait any longer for their applications to be processed.
“Other enterprises are left in limbo, unable to get clarity on whether they and their workers can or cannot get back to work. In their case, the fault often lies with the sloppy, hurried drafting of the new permissions,” Jacobs said, which he added was the result of confusion in the official decision-making process.
He said the Western Cape had twice been the victim of regulations, either by design or by accident. “Sensible lobbying reversed the first ban on wine exports - much to the relief of the Treasury, one suspects.”
Jacobs said the province had again been a victim, though it “shared the pain” with other provinces through the Level 4 ban on the resumption of private construction projects, while “public works projects” were allowed to continue.
“It simply does not make sense that public civil engineering and construction projects are permitted during Level 4 but not private-sector developments or building projects,” he said.
Jacobs said if that restriction did not stem from an ideological dislike
of the small business owner, and if it was not the result of successful anti-competitive lobbying, it made even less sense.
Budget Justice Coalition chairperson Zukiswa Kota said it was especially problematic that informal traders were still not on the streets to offer more affordable alternatives, and the major retailers were positioning themselves to exploit the financial distress experienced by existing spaza shops by opening their own spaza outlets in townships.
National Small Business Chamber founder and chief executive Mike Anderson said a disturbing challenge facing small businesses was their inability to access relief funding. He said a recent survey revealed that of the 53% of small businesses that applied for relief funding, only 6% were successful.
“Reasons cited for this range from poor or no response, unnecessary qualifying criteria and lengthy, tedious processes. At least 94% of small businesses said they were either in cash-flow crisis or would be within the next 30 days. The government urgently needs to remove red tape, speed up relief-funding processes and make this funding available to all small businesses through the nation.”
Anderson said the chamber's plea to the government was to communicate more effectively, eliminate confusion and clarify how and when small businesses could resume operations.