CORONAVIRUS: IMPACT ON BUSINESS
by Gerhard Papenfus
In light of the Covid-19 pandemic, Finance Minister Tito Mboweni recently said that all efforts should be geared towards ensuring that the already weak domestic economy ‘does not grind to a halt’.
Covid-19 has added another dimension to the perfect storm that business already finds itself in. The ESKOM crisis is already having its impact, not to mention all the other factors contributing toward the approaching 0 percent growth rate and 40 percent unemployment rate.
The decline in business activity, as a result of Covid-19, will be an additional blow to business. That’s the one side of the coin. On the flip side, there is business’s legal- and moral obligation towards its employees. The decline in production as a result of the drop in business activity, combined with large numbers of absent employees as a result of either being diagnosed with the virus and booked off on sick leave, with full pay, or being in compulsory isolation, will negatively impact the sustainability of business.
The economic effect of Covid-19 on business will be felt long after the pandemic has passed. The effect on the sustainability of business will have consequences for employees in terms of retrenchments, layoffs, shortened working hours and salary cuts.
As a result we urge government, as a mitigating measure on both business and workers, to make available Unemployment Insurance funds to pay employees during periods of absence as a result of the pandemic.
We are all in this together.
Privileged and challenged to be South African.