Talk of the Town: Questions remain unanswered on small business relief during lockdown

Small businesses are grateful for the promise of relief, but many questions remain unanswered, according to Small Business Institute (SBI) director Bernard Swanepoel.

“President Ramaphosa made a courageous decision and delivered a powerful message in his address to the nation, suggesting that we act together to get through this catastrophic threat to our collective health, economy, and society it underpins,” he said.

His announcements that government will seed a fund for SME relief with R150-million as well as a R2-billion fund endowed by donations from the Oppenheimer and Rupert families were welcome.

“Small businesses were reassured to hear that they are receiving special attention in discussions about protecting our economy. Since 98.5% of all firms in South Africa are small or medium, we face an unprecedented emergency with their very livelihoods, and those of all they employ, on the line. But the devil – or saving grace – will be in the detail,” said Swanepoel.

The SBI notes that the Department of Small Business Development has launched an online portal for businesses to apply for government assistance, but it is unclear if the assistance is available to all businesses, regardless of race, gender, ownership and citizenship, or whether it will be targeted only to majority South African black-owned businesses.

Johan Rupert confirmed the money he (and presumably the Oppenheimers) was donating would be ‘available to ALL South African businesses’.

“It boils down to two fundamental questions,” said Swanepoel. “Will all businesses struggling to stay afloat receive help, or just those the minister identifies as worthy of government assistance?” Second, he said, “How will the private sector funds be distributed? Will it all become one pool of money open to other philanthropic donations for which the President called and therefore the minister’s potential exclusionary inclinations? ”

Two years ago, research SBI commissioned found that formal micro, small and medium sized firms employ 3.9-million people.

“Unless we help them all, regardless of classification, this will lead to extreme social and economic injustice. We accept and promote black economic empowerment as a worthy and important goal for South Africa, but perhaps exclusion is not the best way to honour the president’s call for togetherness in what amounts to war,” Swanepoel said.

by Talk of the Town – https://www.talkofthetown.co.za/2020/03/24/questions-remain-unanswered-on-small-business-relief-during-lockdown/