The government is putting in place a number of measures to assist businesses affected by the overall isolation to prevent the spread of the coronavirus.
Pres. Cyril Ramaphosa announced on Monday night that all South Africans should stay in their homes from midnight Thursday for 21 days. This means only businesses that provide essential services, such as grocery stores, pharmacies, and medical centers may remain open.
FinFind, an organization that handles the financial interests of small, medium and micro business (SMMEs), says the 21-day total seclusion will have catastrophic consequences for all businesses in South Africa.
“We realize that most of these businesses will suffer financially because of these measures, which is why we are developing a number of catch nets and measures to support people whose income is at risk,” Ramaphosa said on Thursday.
One of these is financial assistance to SMMEs. For example, the Department of Tourism will make R200 million available to assist SMEs in this sector who are affected by the decline in tourism.
It is not yet known exactly how these businesses will be assisted or what are the criteria by which the government will provide assistance. The president will provide more clarity on Thursday morning.
Further government intervention for businesses and employees includes paying employees who become ill due to the coronavirus through the unemployment compensation fund. A tax subsidy of R500 per month will also be made available to those workers in the private sector who earn less than R6 500 per month. It will help with about 4 million workers. The state is also considering a temporary rebate in the contribution of workers and employers to the unemployment insurance fund and employers’ contributions to the skills development fund.
The Oppenheimer and Rupert families also made available around R1bn each to assist businesses in need.
FinFind welcomed this announcement and urged SMMEs that currently have cash flow problems to contact their banks, creditors, and suppliers as soon as possible if they are unable to settle their debt.
Piet le Roux, CEO of Business League, says the next three weeks are the most acute challenge ever for business people in South Africa. “The health and wealth of millions of people now depend on the ability of business people to conduct extraordinary business.”
Business League’s operational activities have already been decentralized and the organization will continue to operate continuously during the limitation period. “We monitor the regulatory developments. “We help businesses, business chambers, as well as customers and clients, connect digitally, gain insights, make estimates, stay operational, and set the table for the vital recovery after the Covid 19 period,” says Le Roux.