Urgent need to save small businesses
The government estimates that SA’s unemployment rate will rise to 50% due to the nationwide lockdown.
Some economists believe it will be worse. We will have a clearer picture in the months ahead as the economy eases back into work.
The larger companies will probably survive, though some may have to retrench staff to get the wheels going again.
But the smaller firms are the ones struggling to keep the lights on.
Some have made the difficult decision to turn the lights off for good because they simply cannot sustain their businesses.
The economic effects of the lockdown on Nelson Mandela Bay businesses emerged last week as popular restaurants announced their decision to close shop.
The once-bustling Stanley Street, in Richmond Hill, has not been spared, with at least five restaurants in the precinct announcing they were closing down.
At the weekend, a popular mom-and-daughter shop — Unicorn Cafe and Salon — announced it had no option but to shut down.
“It has become hugely unsustainable, so unfortunately we had to close down,” owner Shan White said of the decision.
To say that this is devastating for the Bay community is an understatement.
The vibrancy that the restaurants and bars have brought to Richmond Hill has lifted the profile of what was once a rundown area in the inner city.
A thriving, cosmopolitan economy was created, improving the property profile and positioning Richmond Hill as a trendy place to live.
But more than just the profile of the area, it created jobs for young chefs, barristers, bar tenders and the list goes on.
Those are the people who will likely join the unemployment queue along with millions of other South Africans.
Though President Cyril Ramaphosa announced a jobs fund to help struggling small businesses, some have not applied for assistance, largely because they did not know enough about it, or some felt the process too cumbersome with a lengthy waiting period.
The government and corporate SA must begin to develop and implement a vigorous economic recovery plan — a plan that will begin to save the jobs of these once-bustling small businesses.
If we continue to lose more small businesses, our economy may never recover.