Amid government’s strategy to ‘flatten the curve’ of coronavirus infections, government departments have shared more details on the measures that would be implemented to support businesses during the nationally declared lockdown and afterwards.

Speaking at an economic cluster briefing on March 24, Trade, Industry and Competition Minister Ebrahim Patel said government would try to minimise damage to businesses and the economy, while protecting the wellbeing of people.

Patel said the Department of Trade, Industry and Competition (DTIC) had asked the Industrial Development Corporation (IDC) to establish a package valued at more than R3-billion to be used for “industrial funding”in the next quarter.

The Minister said the facility would help to address the situation of vulnerable firms and to fast-track funding for companies that are critical to South Africa’s efforts in the fight against the virus and its impacts.

Patel explained that the facility would be available to South African businesses and that the package included a special intervention of R500-million that would be allocated to trade finance to import essential medical products and a R700-million facility for working capital, equipment and machinery.

“We are also addressing surges in demand to prioritise food security, including support for supply chains that are interrupted by large companies closing down; working capital to ensure energy security; and working capital for components manufacturers,” the Minister added.

Further, he noted that essential services that fell outside of the normal IDC sectors would now be considered for funding, since their considerations had been “relaxed”.

Additionally, for existing IDC clients, the IDC had already been in contact with its business partners to consider repayment deferments on a case-by-case basis.

Patel said details of these deferments would be published on the IDC’s website.

Moreover, Patel confirmed that the Competition Commission was already investigating 11 firms that ordinary consumers had complained about in terms of unreasonable price increases for essential products, including face masks and hand sanitisers.

More firms would be investigated and prosecutions would follow, the Minister assured.

Patel said South Africa would take the necessary steps to keep open trade links with neighbouring countries to ensure food supply across the region.

Small Business Minister Khumbudzo Ntshavheni said the department had several instruments in place to assist small businesses across the demographic spread during the Covid-19 lockdown.

These included a resilience and growth facility that had been created specifically to ensure adequate opportunity was created for local manufacturers and suppliers to supply the medical and food industries.

She said the facility would fund working capital of qualifying companies that were able to supply the critical industries at this time.

To qualify, these companies must be South African-registered, tax compliant and employ 70% South African nationals. Priority would be given to businesses owned by women and people with disabilities.

“In addition to banks announcing support for small and medium-sized enterprises (SMEs), the Small Enterprise Finance Agency would introduce a payment holiday for a maximum of six months to reduce the instalment burden of loans for relevant businesses registered with the agency,” said Ntshavheni.

She pointed out that SMEs that were already in distress before the Covid-19 outbreak would not be assisted by any of government’s outbreak-related interventions.

Financial Services

In terms of financial services support, Patel said competition exemptions had been made for banks. The Minister confirmed that the DTIC had issued an exemption for banks under the Competition Act to deliberate on measures that could be used to support businesses and ordinary account holders during this period.

The exemptions would allow banks to work together to devise programmes and relief measures that could help firms, small businesses and consumers that were in distress amid the Covid-19 outbreak period.

In particular, the exemptions would enable the banks to consider matters such as payment holidays and debt relief measures for individuals and businesses in distress, as well as the extension of credit lines and putting limitations on asset repossessions.

“The exemptions would allow the banks to work together and ensure continued functioning of the payment system, as well as sharing information and resources to ensure continued availability of bank notes at ATMs, branches and businesses.

“We have done extraordinary things to enable the banking system to remain strong and intact, so that South Africans can look to accessing the banks in the next three weeks,” Patel noted.

Retail Support

Further, Patel confirmed that government would publish a special gazette to enable shopping mall owners and tenants to consider coordinating their actions and reaching agreements to address matters that would assist tenants in navigating this difficult time.

These matters included payment holidays or rental discounts to tenants, limitations on evictions and other measures that were necessary to ensure that shops and others whose income would be falling sharply during the lockdown would have the necessary flexibility and space to see through this period with as few constraints on them as possible.

Shops and stores that would be particularly impacted on within shopping malls included clothing stores, restaurants and personal care service providers like salons.

Agriculture Support

Agriculture, Land Reform and Rural Development Minister Thoko Didiza said during the economic cluster briefing that the department had set aside a R1.2-billion funding package to address the effects of Covid-19 and ensure sustainable food production after the pandemic.

She confirmed that the department would soon communicate more details around the package, as well as more information about the application channels that would be made available.

Further, the department was working with the Land Bank on a R100-million facility to assist farmers who were in distress, while supporting farmers who had loans that needed to be repaid. “I hope that the other financial institutions will also make arrangements to ensure that farmers who have loans with them are supported during this time.”

Didiza asked agriculture industry players to continue helping and serving the nation to ensure that food security at this critical time was sustained.

Moreover, in terms of food security, Forestry, Fisheries and Environmental Affairs Minister Barbara Creecy said fishing-related companies and operations with existing rights and permits would be granted a three-month permit renewal exemption so that operators were not forced to go into offices to do renewals.

Forestry-related companies, including sawmills, would also benefit from these permit renewal exemptions.

Tourism Support

Considering that tour agencies and hospitality service providers had been asked to stop operating, Tourism Minister Mmamoloko Kubayi-Ngubane said the department had set aside R200-million to support small and medium-sized enterprises in the tourism sector.

“I understand that this was not sufficient, considering the tourism sector had come to a complete standstill and various businesses had been affected. While bigger businesses in the sector would be supported by tax relief and loan payment breaks, the Department of Tourism would specifically look to support small business that were unlikely to survive in these circumstances,” she said.