Local economy suffers during pandemic

Business Coach, Marie-Louise Smith, stated that unemployment is likely to worsen in Mangaung during and after lockdown

As the country settles into Level 4 of the Covid-19 national lockdown, businesses are seeing the effects of the virus on the economy. The local economy of Mangaung, which had already been facing challenges such as high unemployment rate and slow growth, has been one the hardest hit by the pandemic, further compromising local businesses.

According to business coach, Marie-Louise Smith, the Bloemfontein economy is likely to see a rise in the unemployment rate. “Job losses have become a reality and this will be ongoing for as long as the lockdown continues,” she explained. Smith expressed that instead of cutting marketing budgets, local businesses should be advertising more than ever to remain relevant. “Now is not the time to stop marketing.

On the contrary, now is the time for businesses to step it up. Businesses need to be visible and in contact with suppliers, clients and employees. Business owners now have the time to reflect and rethink their business model and need to be on the lookout for opportunities,” said the expert from ActionCOACH Business Coaching. According to Black Management Forum Chairperson, David Uwah, small businesses and informal traders are the hardest hit by the lockdown. “Bloemfontein, being the capital and commercial centre of the province, will further suffer as workers stay at home, businesses are closed and people are not spending as much as they used to. Businesses are also not going to pay taxes like before and government will not be able to generate revenue. The worse hit are the SMMEs and informal traders,” said Uwah.

He emphasised the need for improved at-home working capacity and embracing online business. “Major industries should prioritise capacitating their staff to work from home and give their clients online access to certain processes moving forward.” Local business owner, Bruno Burrie, said that although the lockdown extention is necessary, many local businesses had not prepared for prolonged periods of inactivity. “The lockdown and announcement of different levels threw us off quite drastically. In my industry there are several businesses that will not function again as between 40% to 50% of workshops are not likely to recover,” owner of Swedo-Tech Service explained.

Business consultant, Thabo Pitse, said about 71% of small businesses did not prepare for more than three months of not operating. “Retrenchments could result in 16% of businesses retrenching more than 10 people. However, 48% of SMMEs propose deferred payment arrangements, credit facility and rental subsidy as a way for their clients to support them,” he added.

Nomaqhawe Mtebele