How government will be dishing out the billions to save riot-wrecked businesses

The department of trade, industry and competition (dtic) has conducted a survey that shows the impact of the recent riots on businesses in KwaZulu-Natal and Gauteng and on Friday, also saying how it still intends to help with the recovery.

The survey was conducted among 1,200 businesses and showed that 900 of them, which include insured and uninsured business in the two provinces, required financial support.

These 900 businesses will be targeted by the department to get assistance from the R3.7 billion set aside for them. This fund is part of the broader R38 billion relief package announced by the minister of finance recently.

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Survey results

At least 10,200 jobs were affected in the manufacturing, retail and service sectors. A total of 43% of the respondents said they could recover within a month, while 7% estimated that it would take a year or more.

In Gauteng, 26% of the respondents indicated they required support to replace damaged stock and repair buildings, equipment and shop fittings. In KwaZulu-Natal, 74% of the respondents required help for this. Only 43% of the respondents were insured, while the other 57% were not, making them the most vulnerable and in need of support.

Other results included:

• the estimated cost of the damage is R3.5 billion
• businesses reported lost orders of R6 billion over the next year
• these businesses employed 130,558 people before the riots
• 4,188 people can potentially lose their jobs
• the manufacturing sector had estimated damage amounting to R1,857,661,223, lost orders to the value of R2,077,129,750 over the next year and 2,431 potential job losses
• the retail sector had estimated damage amounting to R1,132,596,383, lost orders to the value of R2,903,845,961 over the next year and 1,111 potential job losses
• the services sector had estimated damage amounting to R204,239,013, lost orders to the value of R345,052,157 over the next year and 447 potential job losses
• the supply chain sector had estimated damage amounting to R200,448,000, lost orders to the value of R563,507,000 over the next year and 42 potential job losses
• other sectors had estimated damage amounting to R71,456,950, lost orders to the value of R140,944,000 over the next year and 157 potential job losses.

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Funds available

The Economic Rebuilding Package will be funded by government through the dtic (R2 billion), Industrial Development Corporation (R1.5 billion) and the National Empowerment Fund (R250 million).

• Businesses will be assisted from the Critical Infrastructure Reconstruction Fund, a grant implemented to support investments affected by the unrest in the two affected provinces to leverage investment by supporting rebuilding of relevant affected infrastructure. This cost-sharing grant of up to 50% of total qualifying infrastructure costs is capped at R30 million.
• The IDC has a comprehensive package that includes funding support for businesses and communities affected by the unrest. The considered response comprises a total recovery package totalling more than R1.5 billion.
• R1.4 billion in the Post-unrest Business Recovery Fund will be used to assist all businesses that operate in the sectors the IDC funds. The funding will be available at concessionary rates to ensure significant developmental impact.
• A R100 million grant allocation will provide technical and financial assistance to small businesses in townships, rural areas and small towns affected by the unrest and associated supply chain disruptions.
• A R10 million CSI allocation will be used to support food security and recovery efforts in affected communities and cater for the rebuilding of school infrastructure and support for care facilities and clinics. The IDC will focus mainly on rural, outlying and less developed areas facing increased vulnerability and work with its established NGO partners to ensure reach and impact.
• The IDC will administer the dtic’s R400 million Manufacturing Competitiveness Enhancement Programme Economic  Stabilisation Fund to support manufacturing  companies affected by the unrest and impacted by supply chain disruptions, as well as offering concessionary funding to affected  companies through interest-free loans.