CNBC Africa

Coronavirus

COVID19: How we can manage business to save lives and the economy – opinion.

PUBLISHED: Mon, 11 May 2020 18:32:04 GMT


CNBC Africa

By Miyelani Mkhabela

Covid19 an unprecedented humanitarian challenge for all countries. Weeks of South Africa national lockdown have given time to make a concerted effort to flatten the pandemic’s curve. South African Coronavirus pandemic spread was at 42 % and it was controlled to 4% three weeks in lockdown, which portrayed good decision making and leadership.

South African health conditions are ranked lower at (118th), based on World Economic Forum Global competitiveness index 2019, which is not conducive to tackling the Coronavirus pandemic. Our infrastructure and systems are not at a state to manage the complexities, we are being saved through sustainable decision making from public sector leadership at the moment.

We have observed leaders weighing up the value of life versus the value of a functional economy and trying to strike the right balance between the two, in order to ultimately protect the population from the virus, while at the same time ensuring that the economy does not suffer irreversible harm. This requires critical and analytical thinking, with high mindfulness and reflections about the life’s that can be lost overnight, when good decisions are not taken by both public and private sector leaders.

The benefits will be measured in infections avoided and in lives saved. The future incomes of those spared to continue productive working lives will be measured as part of the economic benefits realised.

Now that the attention is shifting to reopening the economy, while containing the virus,  the challenge arises from multiple stakeholders as they are thinking for their businesses not to be wiped out from the market , while employees also want to go to work to save their jobs. South African socioeconomic imbalances are the main drivers on the context of our thinking and how we would like to do things, based on history of the country. Macroeconomic stability are lower in South Africa and our corporates and small businesses are not resilient to manage the vulnerabilities and uncertainties of Covid19.

Statistics South Africa reported that, five in six businesses surveyed experienced a drop in turnover over the reference period. 85,4% of businesses surveyed reported turnover below the normal range. Respondents in the construction, real estate and other business services, and transport industries were the most affected by lower than expected turnover.

The report further shows that 42,2% of respondents indicated that they are not confident that they have the financial resources to continue operating through the COVID-19 outbreak. When asked how long business can continue without turnover, 54,0% of respondents indicated that can survive without turnover between 1 to 3 months. The industries reporting the highest percentages of temporary closure or paused trading activity were construction, manufacturing, trade and mining. An Industrial risk mitigation is needed for winter.


South African corporates never followed a process in reopening the economy and this will pose more macroeconomic stability challenges in the future, key industries such as Mining; Manufacturing and agriculture and it’s agroprocessing needed to quarantine workers for fourteen days; make them work for 30 days and release them for a month holiday, that will include a 14 days quarantine before going back to work as a rotating system. The industrial business continuity management approach enables the economy to keep producing while managing the complexity of Covid19 impact not to take much from the $94 billion from our top ten export products and saving the life’s of people’s or worker’s at all.

The country might be unable to maintain price stability because of future anticipated imports with high import costs that can affect the general price increases.

Business chambers are expect to provide corporates guidance to mitigate risk by introducing an industrial business continuity management reliable to avoid closing production again in between May and July 2020, by chance Coronavirus hit the nation as predicted.

Studies have shown that 40 percent of businesses struck by a serious disaster never resume operations, says Doughty. What’s more, he adds, over 25 percent of those that do manage to reopen their doors again are so weakened that they close down permanently within three years.

Looking ahead, four considerations may shape a suitable BCM approach for South Africa

  • South African corporates mainly in Mining, Industrial Development & Manufacturing and agriculture must adopt an Industrial business continuity management (BCM) approach of 14 days quarantined, 30 days work and 30 days off, rotational.
  • The selected industries must have a camp system to ensure no externals to the BCM teams.  
  • The industrial BCM approach is a system to mitigate risks and also planning ahead should the country decides to get back to level 5 lockdown again.
  • Advance training is needed to South African workforce as 2020 can be a full virtual work system’s.

Strategy is, of course, not the only factor determining a company’s success or failure. The competence of its managerial leadership is significant as well.

Miyelani Mkhabela is an Executive Director of Antswisa Transaction Advisory Services.

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