Ever since the imposition of the first lockdown in 2020, Rita Zwane, founder of Imbizo Shisanyama and the face of the township economy, says she has wanted to draft a letter to the presidency to outline the impact of the disaster restrictions on small and medium-sized enterprises (SMEs). Being an optimist, Zwane delayed writing the letter in the belief that business would pick up and she wouldn’t have to lay off any staff.

But over a year into the pandemic – and after a year without income – she feels she has no choice but to write an open letter to President Ramaphosa, urging him to do the following:

• Allow ordinary South Africans to access pension and provident funds for their survival; 
• Postpone tax obligations;
• Provide water and electricity relief;
• Reinstate payment holidays from the banks;
• Provide more accessible financial assistance for SMEs.

In South Africa, SMEs make up a fundamental part of our nation’s economy. They drive innovation, provide unique products and services and reach people in ways that larger companies cannot. The SME sector contributes over 70% to employment and at least 60% to gross domestic product (GDP). 

Currently, SMEs in South Africa face distinct challenges in navigating the Covid-19 crisis. Grassroots businesses have been forced to lay off staff and others have shut down through lack of finances, tough restrictions and lack of support from the government. The effect is evident in deteriorating township economies where most of the SMEs operate.

Appearing on a list of support efforts by the Department of Small Business Development (DSBD) is the R513-billion SME debt relief fund that has barely kept small businesses afloat. In a briefing in March 2021, Violet Siwela, chairperson of Parliament’s portfolio committee on small business development stated that the number of SMEs benefiting from this fund was exceptionally low.

“Of the 35,865 applications Sefa [Small Enterprise Finance Agency] received, approximately 14,800 were fully complete applications, of which 1,497 were approved; this is a mere 4.17% of applications that were successful,” said Siwela.

According to Zwane, the pandemic, the repeated lockdowns and the latest unrest have drained the hospitality industry and now, without any financial support, the future looks grim.

In an interview with Maverick Citizen, she says: “My industry, which is the food and beverage hospitality tourism sector, is greatly impacted and without the necessary support we will have to close our doors.”

Zwane says there’s a need for an urgent review of the failures of the SME debt relief fund to reach the relevant enterprises, as well as the specific relief funds dedicated to the tourism and hospitality, leisure, food and beverage sectors that are allocated to each province. 

Emphasising the importance of her industry, Zwane said SMEs contribute to the advancement of gender equality and youth development in that they comprise more black females and there is a higher proportion of young owners.

“Mr President,” writes Zwane, “I am a 52-year-old woman whose businesses reside mainly in townships. I have cultivated and actively contributed to the township economy for the past 25 years. The despair, anxiety and hopelessness in people is increasing exponentially. Every day I see young people who walk up and down the streets, totally defeated, having given up any hope of employment, and I see children with eyes that once smiled, now consumed by hunger. 

“I am writing this letter in hopes this will help just a family that is without any income.” DM/MC