KZN Business Sense News
Back to overview
COVID-19 Economic And Business Impact Assessments 2020 - Interim Results For Ilembe District Municipality
The KwaZulu-Natal Business Chambers Council (KBCC) is undertaking an assessment of the impact of the Covid-19 pandemic, and the resulting restrictions on economic activity, on businesses in KwaZulu-Natal (KZN).
The assessment is being conducted in collaboration with the KZN Department of Economic Development, Tourism and Environmental Affairs (EDTEA) and the University of KwaZulu-Natal Graduate School of Business and Leadership (UKZN), with the support of the Vuthela iLembe LED Project. The survey was aimed at developing an understanding of the extent of the pandemic's impact on businesses of different sizes, locations and sectors across KZN. The results will influence the design of interventions in response to the impact.
The interim survey results reported below focus on businesses that indicated iLembe as their district municipality in which their main business activities take place. The results confirmed the dire impact that the pandemic is having on local businesses, especially in some of the sectors that dominate the iLembe District economy. In summary, the most pertinent findings were that:
82% of those surveyed indicated that the pandemic had either a severe impact on their businesses (operations reduced by 50%), or has resulted in temporary or permanent closure of the businesses
Almost 50% of all businesses indicate that they are required to restructure their operations and/or businesses
42% of local businesses are unable to meet loan repayments and financing costs
58% of local businesses are unable to meet fixed operational costs
70% of all businesses are experiencing a decline in demand for products and services
57% of businesses indicated that they will not be able to survive beyond three months, considering the level of lockdown
Only 33% of businesses will survive longer than six months, considering the level of lockdown
12% of businesses experienced permanent redundancies
Nearly half of the businesses experienced severe impact on staffing levels, salary cuts and temporary layoffs
The results are a warning about the contraction of our regional economic activity, and resulting consequences, specifically consumer spend and disposable income, unemployment levels and commercial property values.
These are unprecedented economic times with significant business uncertainty, exacerbated by the pandemic. The tough message to all economic development stakeholders is that a mediocre response to these challenges, or even worse no response at all, will have grim consequences for the region's investment appeal and economic competitiveness. A targeted response will have to focus on measures that will yield results, and ignore the high level talking about nice to haves. Business continuity and economic recovery measures cannot include the things that we have always done, or should be doing anyway.
All the social partners in the district, including the iLembe Chamber of Commerce, Industry and Tourism on behalf of business, will have to put their heads together and decide what we need to do differently, and with a sense of urgency.
Contact: Cobus Oelofse
COVID-19 Economic And Business Impact Assessments 2020 - Interim Results For Ilembe District Municipality.pdf
Back to overview