'Nothing goes out, nothing comes in': Small businesses start counting coronavirus losses | Fin24
 
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'Nothing goes out, nothing comes in': Small businesses start counting coronavirus losses

Mar 19 2020 05:00
Sibongile Khumalo

"We are open," reads a sign at the door of a furniture re-upholstering business west of Johannesburg, but despite the inviting message, customers are not coming in.

The shop, usually a hive of activity, is eerily quiet. Piles of upholstery materials line the walls, and a clutch of employees are playing cards at the back of the shop, with nothing else to do.

According to owner and manager, Brendan Booi, business activity took a turn for the worse after the government declared a state of national disaster, along with social distancing guidelines aimed at curbing the spread of coronavirus. 

"I think this is just the beginning. Nothing is going out, and nothing is coming in." 

The local infection rate has passed the 100 mark, and Booi fears that "the worst is still to come".

The disruption could be disastrous for the SME sector, which is already buckling under the strain of a weak economy and funding challenges. The 46-year-old entrepreneur, who started his business from the garage of his house in Diepsloot, now employs seven people, and rents facilities from an industrial park.

"We have not had a single order since Friday, that means no income for us. I’m worried about the payment of wages and utilities.

"If the situation continues like this, I might be forced to shut down for a while, just to avoid incurring further losses. I don't want to end up going to the bank for a loan," he told Fin24.

The Banking Association of South Africa (BASA) says it is consulting banking regulators and the competition authorities to determine how best the industry could protect its customers and small businesses from the social and economic impact of the pandemic.

 Don’t touch me

A few metres from Booi’s re-upholstery business is Shalom Hair and Beauty salon, seats and hooded hair dryers empty. Normally, it is teeming with clients eager to get their hair done.

This is one of the businesses which cannot work around the social distancing guidelines, where physical contact is unavoidable.

"Clients say, don’t touch me, don’t come near me. We have not serviced a single client since Saturday," said hairstylist and manager Mandy Sithole.

"At the end of the month we have to pay rent. I don’t think the landlord would be understanding of our situation. We can’t shut down because we signed up a lease contract," she added, voicing a dilemma faced by many small businesses.

During a recent meeting called by the National Economic Development and Labour Council (Nedlac) discuss the impact of coronavirus on the economy, one of the proposals involved extending assistance to Small, Medium and Micro Enterprises.

Tax and loan relief for impacted enterprises was put on the table, but it is not yet clear if that scheme will be adopted.

The Democratic Alliance would like banks to freeze loan repayments by small businesses for at least four months to mitigate the impact of economic inactivity imposed by the coronavirus on the economy. However, it is not clear if these proposals would be accepted.

Stigma and prejudice

Businesses owned those of Asian descent appear to be facing a different kind of impact, as they appear to shoulder the stigma of the virus which originated from China’s Wuhan district.

For Chan Li, a South African electronic goods dealer, his Chinese ancestry seems to be a major source of suspicion for fearful customers who associate him with the virus.

"People walk past and say, corona, corona, pointing at me," he said, sitting outside his deserted shop north of Johannesburg.

"I have not been to China in all my life. I was born here, but people don’t understand that now," he explained.

Chan gets most of his merchandise from China. He noticed a delay in getting his shipment out of China, but his biggest worry is regaining the trust of the fearful locals, who think of him as carrier of the deadly virus.

South Africa is yet to record a coronavirus-related death.

coronavirus  |  small business
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