Despite the recent return to Covid-19 Level 3 lockdown restrictions, I am still particularly optimistic about South Africa in 2021. Many of South Africa’s optimists have gone quiet over time, leaving us at the mercy of loud, unhappy and pessimistic commentary.
But nothing has changed?
I often hear people say that nothing has changed. It is human nature to constantly focus our attention on the next, most pressing threat or uncertain event. Knowing this, we should encourage ourselves not to overlook the silver linings.
Some of the catalysts of change to celebrate that I think bear enormous relevance, include:
- Covid-19 vaccinations have started internationally, which suggests that the impact of the virus can be managed but might take more time to find the most effective vaccine.
- China is leading the post-Covid recovery. The US vs China trade war rhetoric seems to be something that has left office with ex-president Donal Trump. Investments and economies continue to exist long after individuals/political agendas leave office (which is also relevant in SA).
- Yield-seeking capital is starting to flow towards emerging market countries. Re-allocation of investment capital towards moderately stable emerging market countries seems to benefit South Africa (see the graphs below).
- The intense local drought has been broken, and previously drought-stricken areas are expected to receive above-average rainfall going forward (forecasted La Nina conditions). This will serve to buoy the local and rural economies.
- South Africa has made significant progress on the political front, too. Consider matters related to Covid-19 corruption, Eskom’s new distribution model, the independence of and support for the Zondo Commission, clean-ups in the leadership of various state-owned enterprises and more clarity on issues like expropriation without compensation. Hopefully, our independent judiciary can successfully expedite formal proceedings against the corrupt officials (also those at the upper echelons).
Covid-19 vs business
Many businesses are and will be severely affected by further lockdown regulations. Therefore, we cannot (despite the positive changes above), believe that all our troubles are behind us. Business in South Africa should follow a pragmatic approach by staying in business at all cost.
How to stay in business
a). Great businesses often go bust due to a cash-flow shortage. Creating the necessary operational cash-flow can require additional time during a crisis. Secure additional short-term liquidity now to ensure your business pulls through a likely second Covid-19 economic aftershock.
b). Identify potential Covid risks (per each business division) and prepare immediate management responses. Have a clear and well-communicated succession plan on key individuals. Focus on core competencies but diversify your client base with core products/services.
c). Convert/reframe existing skills and resources by adapting to the latest Covid-19 demand. I have seen a transformation in products, technology, and services adapting to latest market demand (including home deliveries for bicycle parts).
d). Zero-based budgeting (takes a blank canvas approach) – Start with only essential income and expenditure of your core operation. The optimal use of available resources can make all the difference between a going-concern and liquidation.
e). Be 100% transparent with all your stakeholders (they are all in the same boat). A combined focus, clear objectives, and an emphasis on individual responsibility can result in significant increases in overall productivity.
f). Manage your thoughts and emotions carefully. Direct your stress and energy into useful production/output. Increase your networking (gaining new ideas) and surround yourself with positive, like-minded individuals with a ‘can-do attitude’.
Persistence, positivity, and patience will bring promising results in 2021.