Small businesses pray government aid eases coronavirus lockdown

Small businesses close up, lay off staff, default on rent.
Image: Waldo Swiegers, Bloomberg

Marius Delarey’s spacious restaurant in an upmarket Johannesburg suburb thrived on bringing up to 250 people together at a time to share food, booze and lively conversation.

“The business we had was all about social contact. Social distancing is the opposite of what we offered,” he said, until the coronavirus emptied La Boqueria out and prompted South Africa to impose a three-week lockdown starting on Thursday.

President Cyril Ramaphosa announced a raft of measures on Monday aimed at helping small businesses hurt by the lockdown, many of them already reeling from drops in tourist numbers. The country has 709 confirmed coronavirus cases so far.

Governments across the world are offering similar measures aimed at mitigating the economic fallout. But for South Africa – already suffering recession, power shortages, unemployment hovering around 30 percent, and with an economy heavily dependent on now non-existent tourism – the impact is brutal.

“On Saturday, we had 227 customers; on Monday, we had two. Coronavirus has shut us down,” Delarey said, next to tables loaded up with wine he hopes to sell before pulling down the shutters on Thursday.

Read: All small businesses may apply for coronavirus debt relief funding

Ramaphosa’s measures include: unemployment benefit for the temporarily redundant, tax breaks, debt relief and aid packages for the hospitality sector.

The party’s over

“I plan to apply for as many as possible, but … there’s no point borrowing money if you don’t have a business to keep going,” Delarey said. “I would be delusional to think I’ll have a party here in May with 250 people.”

He plans to morph into a smaller operation with delivery and a drive-through, but that will hardly match the turnover of up to R30 million a year the restaurant was making.

He’s doubtful he will rehire all 80 of his staff.

For mobile coffee vender Siyathembo Ralo, 37, whose weekly turnover used to be R2 500 but has nearly halved in the past week, the lockdown will mean relocating his van to a friend’s guesthouse, where at least he might still make the odd sale.

He has four staff between two such vans, and won’t be able to continue paying them. He has barely enough savings for two weeks for himself, after which he’ll need help from friends.

“The president said something about … government measures, but I don’t know what the channels are to access aid,” Ralo said, echoing concerns of other business owners who fear requests will be bogged down in red tape.

Nicolas Panayiotou, 43, will default on his rent for his three wine shops starting next week, send 11 staff on paid leave and hope his bank will be lenient about his overdraft.

“I’m applying just to be in the queue (but) … I doubt I’ll get anything,” he said, while shoppers made a last-minute dash for booze before hunkering down.

“It doesn’t sound like there’s enough money. The kind of relief you’re gonna get is about 200 bucks (rand) at the most, but I need R290 000 just to pay my expenses.”

Listen: John Dludlu, CEO of the Small Business Institute, discusses the Covid-19 relief fund for small businesses.

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