COVID-19 and business sustainability: from immediate support to long-term opportunity

Hosted on 9 July 2020, SAMED Members Forum on Business Sustainability offered participants a wide-angle view of the prospects for boosting exports as we emerge from the economic low-point of the COVID-19 pandemic, some stepping stones to enterprise growth put in place by two very different government structures, and short-term survival strategies as the infection rate surges.

Each presentation was a mixture of gritty realism and an appreciation of the business opportunities that persist despite COVID-19 or have materialised because of this crisis.

Francois Fouché of Trade Advisory at North-West University captured this optimism by observing that 90% of the national economic pie was still intact. “A portion has taken temporary leave but it will resurface.”

His presentation focused on export as a trade opportunity and he highlighted the fact that two-thirds of the South African economy consisted of imports and exports, with a heavy emphasis on imports. South Africa had been a latecomer to globalisation, he said, effectively joining only as a democratic government was instituted. It was now “a very small but very open economy” in which exports were hugely important.

Despite the current imbalance in international trade, Fouché considered that features of the current environment could facilitate higher export rates. He pointed to the weak rand, the African Free Trade Agreement and the gap that might open up for smaller players if the United States-China trade wars continue.

However, the barriers to exporting were considerable, he conceded. In the World Bank’s global competitiveness ratings South Africa’s lowest ranking was in the category of ease of cross-border trade. This was not so much due to tariffs but related to bureaucratic features that could be eradicated with better policy coordination.

Fouché’s advice to business leaders in the current environment was to focus their energies on change, not on mere survival. “You can’t be too busy to change.”

Harvey Viljoen, Chief Director in the Competitiveness Incentive Cluster (CIC) of the Department of Trade, Industry and Competition (the dtic), outlined a number of financial assistance and international marketing support services offered by the CIC. Most of these are aimed at individual enterprises but sector-specific assistance is also available to export councils.

Viljoen acknowledged that it could be difficult to negotiate the dtic’s systems and offered the following advice.

• Establish which chief directorate administers the assistance scheme that interests you.
• Read the guidelines on the website carefully to understand eligibility and time-frames.
• Contact the official listed on the website for the relevant programme. Talk through the issues before you start completing forms.
• Be aware of all the conditions that pertain to reimbursement for expenditure incurred.

If the CIC message was along the lines of “no pain, no gain”, the Small Enterprise Development Agency (SEDA) – an agency of the Department of Small Business Development, was altogether welcoming. SEDA’s Andrew Bam outlined a range of non-financial support services it provides to SMMEs from the pre-start-up stage through to medium-sized businesses with under 200 employees.

He indicated that SMMEs were emerging from the major collapse they had suffered in the initial hard lockdown. Overall, turnover had returned to 72% of the pre-COVID level.

The COVID-19 epidemic had been a catalyst for the Medical Devices Cluster Initiative which had enabled SMMEs to work together and develop “collective efficiency” to compete with larger companies and help meet the COVID-generated demand for medical devices and personal protective equipment.

Bam outlined how SEDA had enabled the SMMEs to participate in fulfilling the demand for essential health supplies and equipment to counter the COVID-19 epidemic. Its interventions included providing SMMEs with convenient access to essential information, improving the interface with government, increasing access to relevant business development and training services, interventions in relation to regulatory processes, market intelligence, and easing financial constraints by “de-risking” lending.

In a switch of gear, Jonathan Goldberg, CEO of Global Business Solutions, and his colleague, Natalie Singer, provided insights on maximising benefits of the Unemployment Fund and COVID-19 Temporary Employer/Employee Relief Scheme (TERS).

They observed that the R29bn paid out by the UIF over the past three months had been hugely beneficial. But making the system deliver had been a battle. They dispensed useful information:

o The normal reduced work time provision of UIF. But remember that the employee needs to lodge the application and the amount paid is affected by the length of workers’ contribution to UIF.
o The CCMA TERS provision which is intended to avert retrenchments for companies in economic distress. This is a complex process with a large amount of paperwork and it takes at least three to four months.

Additional health and safety guidance was provided by Jahni de Villiers, director of Labour Amplified. She stressed the importance of companies undertaking a COVID-19 risk assessment based on the unique characteristics of each workplace. This plan would guide the response to infection among employees and, if thorough, help avert closure of the entire workplace by the Department of Labour. She also emphasised that employees who were able to continue working from home should do so. This would reduce the health risk, ensure that vital roles and responsibilities were not compromised, and promote business continuity.