(4 minutes read)
· There are a few in South Africa, who subscribe to the view on
a positive note that the pandemic will be a game changer for the
economy, which had faced a feat of downgrades from the rating agencies
in the recent times.
· As the lockdown conditions are eased, the demand for some
goods and services will go up: this will help the SMEs to bounce back
to their earlier stage availing the facilities being extended by the
government
There are a few in South Africa, who subscribe to the view on a
positive note that the pandemic will be a game changer for the
economy, which had faced a feat of downgrades from the rating agencies
in the recent times. The ray of optimism emanates from the resilience
of the South African small and medium enterprises. Significantly, in
the recent times, there has been a spate of interventions from the
government and the banking sector to assist SMEs to weather the
current storm.
Upshot among them was the announcement of the South African Reserve
Bank (SARB), a cumulative 225 basis points (2.25%) cut in the repo
rate to put more money back in the pockets of consumers and
businesses. Petrol price dropped due to glut in production and demand
side bottlenecks. Work from home culture now being followed by many
companies can help the establishments to save on rental expenses and
travel expenses. The current lockdown has accelerated many companies’
readiness for remote working – leading some to consider whether they
will still need the same amount of real estate or need to incur the
same amount of travel costs once the lockdown is lifted. This will
help SMEs to boost cash flow, protect employment and respond
decisively to market trends.
In the meantime, e-commerce companies like Amazon and Walmart are on a
mass hiring to meet the online orders and essential goods purchases
during the Covid-19 related lockdowns.
On the local front, fashion designers are responding to the call for
medical supplies, by converting their operations to churn out surgical
masks and protective clothing. The business model is being adopted by
some of local grocery shops and they are also on a hiring spree to
ensure products are delivered at the doorsteps.
As the lockdown conditions are eased, the demand for some goods and
services will go up. This will help the SMEs to bounce back to their
earlier stage availing the facilities being extended by the
government. But the billion dollar question is how long the lockdown
will take to be completely lifted and businesses to be back on rail?
