COVID-19: The impact on SMMEs: Results of survey

COVID-19

THE IMPACT ON

SMMEs

 

Dear fellow employer

 

You may recall that on 9 April 2020, we requested you to participate in a survey aimed at assessing the impact of the current lockdown. You may further recall that, at the time, we informed you that the survey was conducted by an institution tasked with making input to Government’s public policies and processes.

 

Hundreds of employers in the NEASA network participated in the survey. For that, we wish to express our most sincere appreciation.

 

The analysed response to the questions posed in the survey is dealt with below.

 

1. ARE SMMEs ABLE TO COPE DURING THE INITIAL LOCKDOWN (INCLUDING THE TWO-WEEK EXTENSION TO 30 APRIL 2020)?

 

• 78% of responding enterprises indicated that they do not have sufficient cash flow to see them through the lockdown period; and

• despite this, 69% percent of responders are of the view that they would survive the setback presented by Covid-19 lockdown measures.

 

In the case of an extended lockdown (beyond April 2020):

 

• 92% of enterprises indicated that they will not have sufficient cash flow; and

• only 29,5% of enterprises were confident that they would survive the lockdown

 

A sectoral analysis of the survey revealed that:

 

• 74% of enterprises in the wholesale and retail sector;

• 70% in the services sector; and

• 47% percent in the manufacturing sector

 

expressed confidence in enduring beyond 30 April 2020.

 

In the case of an extended lockdown (beyond April 2020):

 

• 30% of enterprises in wholesale and retail;

• 29% in manufacturing; and

• 25% in services

 

believed they would survive.

 

2. HOW HAVE WORKERS OF SMMEs BEEN AFFECTED?

 

• According to the scientific methodology applied, the lockdown could result in 813 000 job losses.

• The aforementioned negative impact on jobs will be somewhat mitigated over time, as businesses recover following the initial lockdown.

 

3. WHAT HAS THE TAKE-UP BEEN WITH REGARD TO THE FINANCIAL AID MEASURES ANNOUNCED TO ALLEVIATE THE IMPACT OF THE LOCKDOWN ON BUSINESS?

 

• 56% of responders have applied to the various funds set up to assist with the alleviation of business hardships as a result of the lockdown;

• however, as at 13 April 2020, only 4% had received approval.

 

4. THE TESTING OF THE ACCEPTABILITY OF A SELECTION OF POTENTIAL POST COVID-19 RECOVERY MEASURES:

 

• 34% of responders supported a once-off “Covid-19 recovery levy” on turnover; and

• 44% supported the concept of a once-off “Solidarity Tax” of between 1 and 2% on personal incomes above a R240 000 per annum threshold.

 

5. THE SURVEY ALSO SHOWS THE FOLLOWING RESULTS IN RESPECT OF OTHER MEASURES:

 

• 32% supported increased Government spending to alleviate hardships on business and the vulnerable in society, even though it would lead to greater fiscal deficits with probable tax increases as a result;

• 64% supported closing down the radically loss-making State Owned Enterprises (SOEs), even though it would result in job losses;

• 3% supported increasing taxes for the foreseeable future;

• 53% supported the launching of major public-private partnership projects, supported by Government guarantees; and

• 48% supported Government to request IMF and/or World Bank loans, understanding that it would require significant policy reforms.

 

To view the full report, click here.

 

NEASA 24/7 NATIONAL HOTLINE: 086 016 3272

legalhotline@neasa.co.za

 

Regards

 

We are all in this together.

Privileged and challenged to be South African.