South Africa may have received global praise for its ability to flatten the COVID-19 curve for the first and second waves without access to vaccines, but it has come at a great cost for small- and medium-sized enterprises. One year since the lockdown began, thousands of small businesses have been closed permanently and its owners and staff have joined the ranks of the unemployed. The enforcement of lockdown restrictions and the up and down movement between lockdown levels have simply been to much for many businesses.
“We just thought, close for three weeks, we closed and then we’ll open with a bang. Six, eight months later, and now since 23 March , I lost my restaurant and we never opened again. I couldn’t pay my March and April rent, so my landlord locked the doors,” said Nolene Potgieter, owner of a 400-seater franchise restaurant in Polokwane.
Nolene had 60 employees and was well on her way to living a debt-free life. Then the pandemic hit South Africa and everything changed overnight. Today Nolene has R3 million debt. In an effort so survive the lockdown, Nolene partnered with an independent restaurant, but this only lasted for three months between October and December. With the increased lockdown over December, her business earned only 15% of its income.
“It’s something that I don’t want anybody else to go through. Oh my goodness, I’m already getting so emotional and I haven’t been like this for the last year. Oh my goodness, I didn’t want this to happen…”
Meanwhile, the country’s economy declined by 7% last year. While the figure attached to negative growth is alarming and has broken records that date as far back as the 1920s, economic experts say it could have been much worse.
Johann De Lange, the Founder and director of business valuation company Worth.Business, said: “I think when you look at the 7% there was an expectation that it will be worse. So it is a little bit better and also businesses are bouncing back, they are adapting to the new normal. If you look at households, the same will apply. A lot of people lost their jobs, it is incredibly sad and disruptive but there needs to be an adaptation to the new normal whether it would be to be more entrepreneurial or need to be a little bit more flexible in terms of employment maybe take on some freelancing work and contract work, you do what you need to do to survive”.
Reabetswe Mabotja, owner of an Events company, said that she followed the advice of experts and became innovative when she could no longer host weddings and events of 250 people and more.
“I started cooking everyday meals for lunch deliveries and home deliveries, for six people, eight people. We started doing gift packs instead of having these big celebrations that we used to. We would do balloons and cakes here and there.”
Unfortunately, this was not enough to see her through the economic storm that was brought on by COVID-19.
“That is actually something that I can do on my own and that means my employees are not coming into work at all. And I’ve got equipment. I have five, six storages that need rent,” she explained.
The Department of Small Business Development introduced a R500 million SMME support intervention for six months from April last year with the intention of assisting businesses with soft loan funding. But both Reabetswe and Nolen said that despite applying, the service was not availed to them.