Durban Chamber of Commerce notes economic affects of Covid-19 crisis

THE outbreak of the coronavirus disease (Covid-19) pandemic has become one of the most significant threats to the global economy and financial markets in recent memory, more so than recent financial collapses, says Nigel Ward, President of the Durban Chamber of Commerce and Industry.

Ward said many businesses, both formal and informal and across industry sectors, have already indicated that they expect a revenue shortfall and a loss of productivity during the course of this pandemic. From a survey of Durban Chamber members on 19 March, several members in the event management and conferencing space indicated that, due to the mass cancellation of events, they had already started restructuring processes, including retrenchment.

“The Durban Chamber of Commerce and Industry is deeply concerned about the impact of Covid-19 on our airline members, hotel operators, and facilities owners. The tourism and hospitality sector have been worst affected by the outbreak and the control measures that have been introduced to curb the effects and impacts of the outbreak,” said Ward.

Ward said the Chamber had noted the recent regulation imposed by the government on the sale, dispensing or transportation of alcoholic beverages, and said while this regulation was necessary and would help curb the spread of infection, it is difficult to ignore the fact that it will translate into significant revenue losses for businesses in the tourism and hospitality sector.

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“Durban is home to some of the most attractive and busiest tourist nodes such as the Golden Mile with its new Promenade, Florida Road and Umhlanga Rocks, with an array of social activities that contribute positively to Durban’s economy. A decline in economic activity will translate into revenue losses for businesses and the City. With many large events being cancelled, South Africa will forgo the opportunity of reaping the socio-economic spin-offs that these events bring,” he said.

Furthermore, Ward said the Durban Chamber anticipates that the aviation industry will come under significant pressure as a result of flight restrictions and travel bans.

He said as yet, the estimated cost in terms of loss of revenue for businesses and the economy as a whole cannot be adequately quantified.

“Our national economy will not be immune to the effects the Covid-19 pandemic has had and will continue to have on the regional and global economy. A recent article by Moneyweb indicated that the Johannesburg Stock Exchange plunged by more than R2.3 million since mid-February, which is alarming. While markets are not performing well, we encourage investors to perform the necessary technical and fundamental analysis to identify opportunities. The decrease in the interest rate in order to stimulate economic activity will help to revitalise economic activity,” he said.

Ward said businesses need to adopt and enact business continuity plans that are agile and adaptable to cope with the evolving nature and circumstance of the current crisis.

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