This is how SA’s small businesses were hit hardest by COVID-19

The COVID-19 pandemic has wreaked havoc on businesses worldwide, and South Africa's small and medium-sized enterprises (SMMEs) have been hit particularly hard. A recent survey conducted by non-profit company BeyondCOVID sheds light on the extent of the damage and the challenges that lie ahead for these businesses. Lings Naidoo, Director & Joint-Founder at BeyondCOVID, joined CNBC Africa to discuss the findings of the survey. The survey, which covered a wide range of businesses across various sectors, revealed some concerning statistics. While there are signs of recovery, with 21% of businesses now operating as usual compared to 20% nine months ago, there is still a significant number of businesses that remain closed. The closure rate has decreased only slightly from 23% to 21%, indicating that many businesses are still struggling to stay afloat. One of the most alarming findings of the survey is the disproportionate impact on SMMEs compared to corporates. SMMEs are now 26 times more likely to be closed than corporates, with 26% of SMMEs reported as closed, compared to just 1% of corporates. This stark contrast highlights the need for targeted support and interventions to help SMMEs recover and thrive. When examining the sectors most affected by the pandemic, it is clear that industries such as accommodation, food, arts, entertainment, and recreation have been hit the hardest. Nearly one in three businesses in these sectors remains closed, posing a significant challenge to the overall economic recovery. On the other hand, sectors like financial services and professional services have shown resilience, with almost half of businesses operating as usual. The survey also sheds light on the grim outlook for employment in the coming months. 13% of businesses, on average, are planning to retrench staff over the next six months, with SMMEs facing a higher percentage of job losses at around 30%. This could translate to 1.2 million job losses in the SMME sector alone, further underscoring the need for targeted interventions to protect employment. Looking ahead, the road to recovery for South Africa's businesses is long and challenging. The survey respondents predict that it could take up to 3.5 years for businesses to fully recover from the impact of the pandemic. This timeline aligns with economists' projections, suggesting that the country may not return to pre-pandemic levels of economic activity until 2024 or even 2025. In light of these findings, BeyondCOVID is advocating for a concerted effort to support SMMEs and foster a more resilient business environment. The organization is working on programs that aim to replicate the risk profile of corporates within the SMME sector, promoting collaboration and collective action among smaller businesses to enhance their sustainability. As South Africa grapples with the ongoing challenges posed by the pandemic, it is clear that targeted support for SMMEs is crucial to driving economic recovery and ensuring the long-term viability of businesses across the country.