The “devastation” of the Covid-19 pandemic on South Africa’s small, medium-sized and microenterprises (SMMEs) cannot be underplayed, nor can the importance thereof be over-emphasised, Department of Small Business Development chief director Mojalefo Mohoto has said.
Speaking during a Trade and Industrial Policy Strategies- (TIPS-) hosted webinar on June 23, Mohoto stressed the impact of the pandemic on SMMEs, as well as the economic struggles brought about as a result of the subsequent lockdowns.
The department conducted a study in collaboration with the World Bank, and found that, owing to the pandemic, about 47% of small businesses in South Africa have had to close their doors, permanently or even just temporarily, during the first phase of the lockdown.
In Gauteng alone, 42% of township and urban area small businesses have closed their doors permanently, Mohoto lamented, stating that the department, in particular, has “a huge task of trying to revive, or find new businesses to join, the sector”.
This situation continues to worsen as the pandemic continues, with Mohoto saying it is an open question if the relief measures launched at the start of the pandemic are sustainable in the long term.
“We have since looked forward in terms of the sustainability of these relief measures in terms of putting some programmes together that we can use as an entry point, especially towards the District Development Model (DDM),” he commented.
Some of these programmes are single-centred within districts, while others assist rural and township enterprises – such as the Township Entrepreneur Development Programme, which Mohoto said is part of the department’s SMME support plan.
“We also have some programmes that look to help sustain businesses that have managed to survive the pandemic, and some of the programmes will look at [encouraging] tech start-ups [to join the sector],” Mohoto elaborated.
Technology has been found to play a significant role in the businesses that have managed to survive the Covid-19 pandemic thus far and is the reason it is a large consideration in the sector’s survival.
Going forward, Mohoto emphasised the importance of “enhancing technology” within businesses so that they can continue to operate and produce products or provide services.
As part of this, the department has developed “digital hubs” that are being rolled out across South Africa. These hubs, Mohoto explained, will look to enhance technology use within businesses, but also consider possible tech-led businesses that can be supported.
Core to the success, however, is how these programmes are coordinated across the public and private sectors.
Mohoto said that programmes will be coordinated through the DDM, where a single plan within a particular district can be applied, but it will also look to infuse various programmes into a single programme to be implemented across districts.
“We are trying to rally our efforts and resources into a single plan that we can implement.”
The department is also looking to include the private sector in attempts to enhance localisation, especially given the various opportunities that have presented themselves since lockdown – substituting imported products with locally produced and manufactured items.