Question

What did the South African government do to assist small businesses financially during the Covid-19 pandemic? Do you agree with their (the government’s) strategies or not? Explain. Describe what you think a sustainable small business sector in South Africa should look like post-covid-19; include the new types of businesses that you think will emerge during and after the covid-19 pandemic.

Answer 1

The following are some measures taken by the South African state to help small businesses-

1. Debt Relief Funding Scheme-For small & medium firms that are negatively impacted, directly / indirectly, due to the pandemic. This is a soft-loan facility aimed at helping existing SMMEs so as to keep them afloat for a span of six months from April 2020.
2. A payment moratorium will be given to the qualifying small firms for a period of a maximum of six months, so as to lessen the instalment liability of loan obligations on the impacted SMMEs.
3. Resilience Facility-SMMEs who locally produce hygiene, healthcare products, & food products that are in demand in order to control the spread of the coronavirus. This facility provides working capital, stock, bridging funding, & equipment finance. The funding sum will be based upon the funding requirements of the actual business.
4. Spaza Support Scheme-It aims to fortify Spaza store as natives’ convenient access to basic items, as well as facilitate bulk procurement opportunities, & realise the potential for Spaza shops to be a marketplace for locally produced items.

This stimulus package is a step in the right direction but more needs to be done.

In a couple of years, the digital revolution (e-commerce etc.) will greatly change how small businesses in South Africa function, attract financing, expand their firms & change the overall economic landscape..
Technology is the main catalyst. Robotics, AI, Blockchain ,etc. will become even more common than they are, allowing private enterprise to operate more cost-effectually, generally with lesser employees. Start-ups will alter the face of South Africa’s economy as they’re more in tune with what their consumers require, particularly compared to big corporates.