Ramaphosa: While businesses remain vulnerable, saving lives is the priority

President Cyril Ramaphosa said building a business is a lot like raising a family – “It takes time, patience, constant support, and consistent nurturing from infancy to maturity”.

He said it’s heartbreaking for business owners to close the doors on something they build from scratch.

In his latest letter on Monday, Ramaphosa acknowledged the pandemic and measures implemented since its onset “have had a detrimental impact” on businesses, and to a larger extent, the country’s economy.

He says there are promising indications of the economy recovering, citing growth in job creation across a number of sectors – from manufacturing to mining to agriculture.

“With the pandemic showing no immediate signs of ending, businesses and workers remain vulnerable”.

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Read Ramaphosa’s full letter below

Dear Fellow South African,
 
Starting and building a business is a lot like raising a family. It takes time, patience, constant support, and consistent nurturing from infancy to maturity. For many business owners, seeing a business that you grew from scratch struggling to survive, or even being forced to close its doors, is heartbreaking.
 
Since the onset of the Covid-19 pandemic, this has sadly been the situation facing many businesses both large and small, not just in our country but around the world. Many have had to reduce the working hours of their staff or even retrench them.
 
The pandemic and the measures we have had to take to contain the spread of the virus have had a detrimental impact on businesses.
 
In dealing with the pandemic we have sought to adopt an evidence-based approach in both policy and practice, considering scientific research, clinical expertise and capabilities, and impact on all sectors of the population. We have sought to have a balance between saving lives and preserving livelihoods.
 
We have sought to mitigate the impact of the successive lockdown restrictions on people’s livelihoods, or risk a second and possibly worse epidemic of poverty and hunger in future.
 
In the earliest days last year, we introduced measures such as the Covid Temporary Employer/Employee Relief Scheme (TERS), the COVID-19 Loan Guarantee Scheme and various mechanisms to support small businesses to provide immediate and short-term relief to burdened employees and business owners. In addition, the special COVID-19 Social Relief of Distress grant and broadening access to existing social grants provided lifelines to indigent individuals and families.
 
Through these interventions we were able to mitigate the worst effects of the pandemic, preventing the closure of many businesses and the loss of even further jobs. They provided a firm foundation for the Economic Reconstruction and Recovery Plan that we launched in October last year.
 
As part of that plan, we introduced the Presidential Employment Stimulus to provide income and livelihood support to millions of beneficiaries. Through the stimulus, over 300,000 young people have been placed as school assistants. More than 100,000 subsistence farmers are registered on the first-ever database of its kind where they have access to technical support. More than 30,000 young people have been given opportunities in the cultural, creative and sports sectors. Young professionals have been given opportunities in infrastructure development, healthcare, environmental conservation and a number of other sectors.
 
There are promising indications that our economy is steadily recovering, with growth and job creation in a number of sectors, from manufacturing to mining to agriculture.
 
At the same time we know that this ‘bigger picture’ is cold comfort to workers and business owners who have suffered immeasurably over the past year and a half, and were hoping to see their situations improve in as the economy slowly opened up.
 
The rapid rise in infections being fueled by the new Delta variant has necessitated that we impose tighter restrictions on the movement of persons, on the operation of certain businesses and on public gatherings, among others.
 
As I said last night in my address to the nation, these have not been easy decisions to make, mindful as we are of their impact on people’s livelihoods.
 
Just as we did at the beginning of the pandemic, we have been engaged in deliberations with all social partners, business, labour and civil society to see what financially sustainable measures we could introduce to support businesses and individuals in distress at this time.
 
The negotiations at Nedlac have resulted in consensus that the most practical and financially sustainable measure that can provide urgent relief is extending the COVID-19 TERS scheme to sectors that are affected by the adjusted level 4 restrictions.
 
We will soon publish the details of this extension, including details on who is eligible.
 
To support businesses whose operating licenses and permits expired between March 2020 and June 2021, we are extending their validity until 31 December 2022. In addition, new business licenses or permits that are issued from the 1 July will also be valid until 31 December 2022, and no license fee will be payable.
 
Certain businesses that were initially not allowed to operate under the adjusted Level 4 regulations will be permitted to reopen under strict health conditions. This will bring great relief to not just business owners but workers, especially in industries such as hospitality.
 
Over the past year, we have also been working consistently to protect vulnerable workers whose jobs were at risk, particularly in hard-hit sectors like retail, food and beverage and the metals industry. Through processes facilitated by the CCMA some 58,000 jobs have been saved.
 
With the pandemic showing no immediate signs of ending, businesses and workers remain vulnerable.
 
It is thanks to the social compacts we continue to forge that government, business and labour have been able to work together to buffer workers and businesses from the pandemic’s harsh economic impacts.
 
For now, our priority is saving lives, and ensuring that we provide the necessary support, within our means, to prevent more businesses closing down and more jobs being lost.
 
As we did with the COVID-19 TERS scheme, government is firmly committed to continue its engagements with business and labour to find a way through these distressing times that both saves lives and protects livelihoods.
 
With best regards,

Cyril Ramaphosa