Levels & lockdowns 365 DAYS
On March 23 last year, the president announced total lockdown from midnight, March 26, initially planned for 21 days, but then extended, as the country’s battle against Covid-19 began. A year on, The Mercury looks at how far we have come and still need to go.
IT’S been an arduous journey for business, and the immediate future looks bleak with expected new coronavirus strains and the delayed start to the Covid-19 vaccine roll-out.
This is the sentiment from the KwaZulu-Natal business community a year after the country went into lockdown to curb the spread of the pandemic.
Organised business said tourism and the hospitality industry were the worst-hit sectors in the business space of eThekwini and the North Coast.
“The Covid-19 crisis has turned into a (situation) of ravaged business confidence and significant uncertainty,” according to the latest report on business confidence in the North Coast-based iLembe District Municipality.
The region, which is traditionally a tourist destination and business hub, is home to pristine beaches, the upmarket Zimbali property development and the Ballito retail business zone.
“The Covid-19 pandemic has wrenched the confidence from KZN North Coast’s tourism sector,” the iLembe Business Confidence Index (iBCI) assessment revealed.
In addition, business expectations for the first half of this year were low, the report said. “This disheartening outlook emphasises the extreme disruption caused by the lockdown regulations. And despite the adjustments to alert levels, it is obvious that businesses are not convinced that the destructive impact of the pandemic on the regional economy, and its businesses, will improve over the next six months.”
While agriculture, forestry and hunting sectors are said to have been slightly better off, the assessment shows that all sectors showed negative business confidence.
The construction, property development and property sales sector was the second-most confident.
Having felt the full brunt of the business restrictions, tourism, catering, accommodation and property management was the second least confident sector.
“Business expectations within this sector for the first half of 2021 remain dejected, indicative of the uncertainty experienced by many tourism businesses, and their struggle to plot an escape from the consequences of business restrictions.
“The least confident economic sector, however, remained transport, warehousing, and storage. Diminished confidence in the manufacturing and assembly sector was driven by, among other factors, the uncertainty around the extent of the predicted reduction in consumer spending.
“The only sector that had a positive outlook for the first half of 2021 was the health and wellness, including the medical and fitness sector, substantiated by the anticipated increased activity in the wellness subsector when schools reopen, and the need for psychological and mental support during this period of ‘business pessimism’.”
Palesa Phili, chief executive of the Durban Chamber of Commerce and Industry, said the hard reality was that all business sectors had been hit.
“The tourism value chain has been negatively impacted, inclusive of large hotel groups and tour operators all the way to township businesses and informal businesses operating within this sector. SMMEs, in particular, are in severe cash-flow distress, with many of our member businesses practically in the intensive care unit,” she said.
Durban businessman Naushaad Osman shared his journey of surviving in the restaurant industry. Osman, a professional accountant, said it was his creative flair which made him decide to step into the restaurant industry when he opened The Junk Yard in 2018.
“We were a 250-seater restaurant, and we hosted private and other events like comedy shows and fashion shows because we had a large functional space that could be set up,” he said.
“There was much hype and we were quite busy in that first year and then it settled and you realise there are seasons, holidays and each week and month is very different. Things became tougher and we were hoping 2020 would be busier and business would pick up,” he said.
Osman said he can clearly recall the day the president announced the lockdown.
“I kept wondering what do we do? I didn't know how long it was going to last and it was just before the Easter holidays and we had stocked up in time for the holiday season. Everybody was scared.”
He said the Unemployment Insurance Fund’s Temporary Employer-Employee Relief scheme funds helped them stay afloat for a while until they were able to trade as a takeaway in April. The restaurant had to cut staff by 50%, with only kitchen staff working while waiters and baristas stayed at home.
“Unfortunately, landlords still wanted full rent for the month we didn’t trade, which was very difficult – and because we couldn’t afford to pay the full rent we were asked to leave.”
Osman said he had to make the tough decision to shut down operations as there was no clear indication of the situation improving under the strict lockdown rules.
The business closed for about six months and reopened in December last year, during which time Osman said he had to sell assets to pay off some of the debt.
“We moved from a huge restaurant space to a tiny 40m² space, basically a container operation, and we condensed all operations to make it work,” he said.
Osman said the support he received from staff and customers was key to the rebuilding process.