Covid- 19 lessons for businesses
Promising future with record property sales, manufacturing pickup
THERE is a well- known African proverb that says: If you want to go fast, go alone. If you want to go far, go together.
The outbreak of Covid- 19 has underscored just how true this is. While banks have gone to great lengths to assist customers with relief programmes, payment holidays and other support measures during a very difficult economic period, government, together with the financial services industry, have also used their communal muscle to support individuals and businesses experiencing financial strain.
To demonstrate just how powerful collective action can be, this was highlighted by the regional response to the pandemic in Kwazulu- Natal, spearheaded by the former MEC for economic development, tourism and environmental affairs, Nomusa DubeNcube, where eight clusters were initiated during the early stages of the lockdown to assist the province in its recovery efforts.
As part of this response, various webinars for small and medium enterprises ( SMES) were hosted, thereby creating a powerful information forum to ensure businesses are aware of the support programmes available from individual banks, industry, private institutions and government.
Some businesses were in a position to adapt quickly and move away from their core business to manufacture goods in high demand ( for example sanitisers), to respond to the needs of different sectors to combat the effects of Covid- 19. Others tailored their operations to accommodate online trade.
However, there was a significant concern about the pressure SMES would face if they were not in a position to operate and liquidity dried up. Due to the interconnected nature of the value chain, pressure on large firms can quickly create a ripple effect that puts smaller businesses under strain. Moreover, where SMES are dependent on only one source of income, the pressure can become overbearing.
One of the key learnings has been a definite requirement to mould specific solutions to suit the unique circumstances and funding needs of individual businesses – a holistic approach is required. In Kwazulu- Natal, manufacturing, finance, public services and agriculture make significant contributions to the economy, but depending on the individual business, the needs may be starkly different.
While the pandemic has accelerated the move to digital banking, and continues to provide customers with safe and convenient ways to manage everyday banking tasks, it has also highlighted what a difference an empathetic “warm body” approach can make, particularly when consumers are experiencing financial hardship and stress.
So what does the future hold? Although the economy in Kwazulu- Natal will likely remain under strain for the foreseeable future, encouragingly, green shoots have started to emerge. September has seen the highest number of property registrations in any single month in 2020, surpassing even pre- lockdown levels.
With the manufacturing sector being the largest contributor to GDP in Kwazulu- Natal, it will play a key role to fuel economic recovery in the area. Manufacturing tends to be highly seasonal, with September to November often the most important sales period. Supporting innovative financing practices that ensure manufacturers can operate competitively ( eg, through increased energy efficiency, automation and expansion) will be key.
Finally, as the banking industry
continues to adjust to the new normal, truly understanding the particular needs of the local market, while working together with government and industry, will allow us all to go even further than we dreamt we could.
Mbatsane is the managing executive for Regional Coverage in Kwazulu- Natal and Mpumalanga.