President Cyril Ramaphosa may well have thwarted an economic meltdown bigger than what’s to come by shutting down the country for a further two weeks, says Servest. The facilities management company fully supported the extension of the lockdown, saying it was saving lives as well as the economy in the long run, according to its sales director Khanyiso Myathaza. But experts warned that small businesses had their work cut out adapting to the uncertain new order under the Covid-19 pandemic. “Why Cyril had to impose the extended lockdown is the issue of death as a result of injury on duty…
President Cyril Ramaphosa may well have thwarted an economic meltdown bigger than what’s to come by shutting down the country for a further two weeks, says Servest.
The facilities management company fully supported the extension of the lockdown, saying it was saving lives as well as the economy in the long run, according to its sales director Khanyiso Myathaza.
But experts warned that small businesses had their work cut out adapting to the uncertain new order under the Covid-19 pandemic.
“Why Cyril had to impose the extended lockdown is the issue of death as a result of injury on duty and the insurance that goes with it. He was avoiding a situation where multitudes of South Africans contract the disease in the workplace, to the extent that it bankrupts the compensation fund and the insurance companies,” said Myathaza.
This would have affected the compensation fund, insurance companies and the actual employers, with government being the largest employer in South Africa.
“So for the economy to survive, all of this will have to remain in place unharmed, because if a large proportion of the workforce contracts this disease, the system collapses. He did the right thing at the right time.”
On Thursday night, Ramaphosa announced that the Industrial Development Corporation had set aside R3 billion for the procurement of essential medical supplies. About R130 million in funding had already been approved and a further R400 million was expected to be approved in the coming week to companies who applied for funding under this special facility.
The Small Enterprise Finance Agency approved the postponement of loan repayments for a period of six months, while small business debt relief and business growth facilities were currently adjudicating applications for assistance.
A total of R500 million in support was available.
Government has reprioritised R1.2 billion to provide relief to smallholder farmers and to contribute to food security.
Myathaza argued that small businesses were likely to embark on pay cuts, lay-offs, and unpaid leave periods, which would create a credit crunch as the working and middle class struggled to make debt repayments in the coming months.
– simnikiweh@citizen.co.za
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