Let's turn this crisis into a lesson in resilience
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It seems as if South Africans have enjoyed no respite from bad economic news for many months. Last year, emerging market assets were being sold off on fears of the potential impacts of the US-China trade war. No sooner was that issue resolved than Eskom announced load shedding in December with renewed ferocity.
In February, South Africa was presented with a Budget that painted a picture of rising national debt over the next few years and little scope for fiscal relief. Shortly afterwards, gross domestic product figures for the fourth quarter were released, showing the economy contracted by an unexpectedly large 1.4percent compared with the third quarter.
President Cyril Ramaphosa and his Cabinet have taken swift and sensible action.
But South Africa is an extremely open economy, heavily dependent on the economic prosperity of its trading partners and investors, particularly China and Europe. Unless those countries can tackle the pandemic quickly and effectively (and China is already showing encouraging statistics), South Africa will be unable to get back on its feet.
The FTSE/JSE All Share Index, as an indication of the health of South Africa’s business sector, has fallen by one-sixth over the five years to March 17. But this is clearly an overreaction. Within the chaos lies opportunity.
In the first few days of the pandemic, the most appropriate response for the government, businesses and individuals is to contain the spread of infection and give care to the ill. It is not the time for politicians to make incendiary statements, for businesses to shut their doors or for individuals to stockpile groceries and sell their assets.
These are times when it is appropriate to draw on insurance or savings and help fellow South Africans as much as reasonably possible. As businesses, sending staff home without pay is as senseless as promising to pay people who are not working and generating revenue. Those promises cannot be fulfilled for long.
The longer-term consequences of letting the economy lie idle for weeks are too dire to contemplate.
But the next phase, as the virus is contained - and no-one knows how long that will take - presents a range of opportunities for business. Practical measures taken to combat the virus could become embedded into a new, more productive approach to work that allows your staff more autonomy while measuring them on output rather than time spent in the office.
This could be used as a period for strategising with your staff to generate ideas on how to change the business model, with the goal of improving efficiencies, strengthening the resilience of the business or expanding opportunities.
No great success story ever took place without severe adversity and challenges being overcome. We plan to turn this crisis into a lesson that will make us more resilient in the long run.
Andrew Bahlmann is the managing director of Deal Leaders Africa.