The damage is done: SA’s hard

A small businesses premises in Roosevelt Park. Image : Lorne Philpot

The damage is done: SA’s hard lockdown killed many small businesses

South Africa’s year-long national lockdown wreaked havoc on so many of the country’s small businesses and the self-employed.

The damage is done: SA’s hard

A small businesses premises in Roosevelt Park. Image : Lorne Philpot

The current surge in COVID-19 infections in the country has South Africans questioning when new lockdown restrictions will be announced. The true cost of South Africa’s extended national lockdown is ever more visible now than before. Just walk through a mall and count the number of vacant shopfronts, or notice the number of empty business premises when passing through residential areas.

While South Africa waits in anticipation for another family meeting – when President Cyril Ramaphosa announces updated national lockdown restrictions – owners of small, privately owned companies and the self-employed wait anxiously to learn whether revised restrictions will be harmful to their businesses, and their livelihoods.  

IMPACT OF LOCKDOWN RESTRICTIONS

According to Business Insider, experts have said that countries would be worse off without having implemented lockdown restrictions over one year ago. However, the ordinary South African in the street may not agree with this, depending on an individual’s circumstances, and how the lockdown has personally affected one.       

Driving through suburban Johannesburg one cannot help but notice the number of properties — which once served as business premises — that are now To let or For sale, with business collapse being the most probable cause.

VACANT COMMERCIAL PROPERTIES ABOUND

Several small companies and self-employed South Africans operated their businesses from home or converted business premises in residential areas. For customers, it was convenient and comforting not to have to travel to a mall or into town, for a haircut or to place an order for some printing at a business in the neighbourhood.

Many businesses folded under the national lockdown and many others have not yet been able to begin trading due to having been mothballed. The increasing number of empty business premises located across the country illustrates the severity of this situation.  

In several parts of Johannesburg, it is not just one or two commercial properties for sale in a street but one consecutive property after another that has For sale or To let signs out front.    

A nursery school in Roosevelt Park for sale during the height of the extended national lockdown. Image: Lorne Philpot

NO EASY RESTART FOR ENTREPRENEURS

The likelihood of self-employed individuals restarting businesses in the current economic climate is not good. Market conditions have altered significantly with consumers having become more cautious in their spending habits, compounded by continued restrictions on gatherings, events and the reduced ability of people to do things they used to do without fear.

The South African economy will be poorer without the many hairdressers, beauty salons, caterers, event organisers, wedding planners, photographers, travel agents, private gyms, corporate gifting suppliers, printing companies and many other small businesses that have not survived the economic impact of the country’s lengthy lockdown.

Several small businesses have been closing their doors in Northern Johannesburg. Image: Lorne Philpot

SA’S UNFAVOURABLE BUSINESS CONDITIONS

South Africa was once known for its ease of doing business. The country was praised for the minimal red tape and obstacles entrepreneurs encountered in getting a business off the ground. However, this has changed over the last few years.

Daily Maverick reports that South Africa had slipped from 32nd position (in 2008) to 84th position (in 2019) in the World Bank’s Ease of Doing Business report.

Increased legislation, registrations, rigorous compliance requirements, labour regulations, unstable electricity supply, increased cost of telecommunications and a host of other hurdles make it both difficult and unattractive for entrepreneurs to start businesses in South Africa.

This situation has serious implications for the economy and the growing number of South Africans who are unemployed, losing their businesses, cars, homes or facing bankruptcy.