We need to consider Lockdown 2.0


“We need to go back to the drawing board. We need Lockdown Lite.”

This the advice of Hennie Ferreira, CEO of Osidon, who weighed in on the way for-ward for small businesses and entrepreneurs after the 21-day nationwide lock-down.

In the points below Ferreira addresses some pertinent issues for small businesses and entrepreneurs.

What is the current situation for small businesses?

As it stands, we officially have 1845 infections, 18 deaths and we have conducted 63 776 tests. Covid-19 is a global health crisis and is forcing the entire world to re-evaluate the way we conduct our lives as well as our business.

South Africa has been praised for its reaction to the pandemic, taking decisive action before the virus spreads beyond control. I applaud the South African government for taking charge to protect its people. Unfortunately, the same cannot be said for entrepreneurs and small businesses.

The grim reality is that, just days after applications for support funding opened, they are already oversubscribed, proving the devastating impact of Covid-19 on the economy. For example, the Sukuma Relief Programme – an initiative aimed at sup-porting small and medium enterprises (SMEs) that are financially impacted by COVID-19 – has been nearly three times oversubscribed, with applications for fi-nancial assistance far exceeding the current available capital of R1 billion.

The impact of this lockdown on business owners is devastating. And, as the sector responsible for 60 per cent of job opportunities in country, the wider impact is un-thinkable. Most small businesses don’t have the capital or the resources to survive for extended periods without conducting business and generating income. While Covid-19 causes illness and in some cases death, poverty, unemployment and a non-existent economy will also cause death.

Global leaders are likening the impact of Covid-19 on the global economy to the 2008 financial crisis and the Great Depression. The nail in the coffin for South Africa came at the same time the lockdown came into effect. Rat-ing agency Moody’s cut the country’s sovereign credit rating to sub-investment grade, meaning the country now has a junk rating from all three major internation-al rating agencies.

We need to have a serious conversation about the way forward. We need to come up with an economically feasible “Lockdown Lite” to save our economy.

What does Lockdown Lite look like?

Let’s consider what the immediate future looks like. The most important thing we need to do is to stimulate the economy as much as we can. After all, innovation and business growth come from entrepreneurs. If they cannot operate more freely, who will think of innovative ideas and make it happen?

My proposal would be that any businesses that cannot operate from home, be given permits to operate from their offices. While restrictions will still be necessary, and businesses will by no means flourish, this would at least provide an opportunity for them to survive.

While I am not suggesting we go back to a world before Covid-19, certain measures can be relaxed to save the economy. We still need to protect the elderly and the vulnerable, continue practicing social distancing and ramp up education about Covid-19 and the importance of good personal health to prevent the spread of the virus.

Where possible, we can make allowances for businesses and entrepreneurs to operate. Restaurants, for example, can be restricted to no more than 100 people at any given time. Travel can still be restricted (such as within cities or provinces) and curfews can still be imposed after office hours.

Furthermore, those businesses that can operate in isolation, or from the homes of business owners and employees, continue to do so.

I also propose that support funds be channeled specifically to industries completely shut down by Covid-19, such as tourism. If this can be implemented, until late this year, we have a chance to save the economy, jobs and thousands of small businesses.

What do we need to make Lockdown Lite happen?

In order to survive the Covid-19 crisis, we need money and resources. An active economy, with operating businesses, will provide the finances we need to access re-sources and to effectively fight this pandemic.

• Osidon specialises in company registration, accounting, tax, payroll and compliance services for SMEs and entrepreneurs.