Wed, 01 Apr 2020

As we heard from the President on Tuesday, from midnight tonight, there will be a nationwide lockdown. Initially, this is set to last 21 days.

As of Wednesday 25 March, South Africa had 709 confirmed cases of coronavirus. More worryingly, since the first case was detected on 5 March, new infections have doubled every few days. If this continues, there will be hundreds of thousands of cases by mid-April.

The 'social distancing' measures announced by the President will save lives. However, as he acknowledged, the economic implications are dire.

So how should individual businesses respond to the outbreak and prepare for lockdown?

Equip your staff to work remotely

If you haven't already prepared for your workplace to close, you should do so urgently.

For some traders, such as restaurants and bars, this will mean shutting down their business.

Others will have the capacity to continue working throughout. This requires that employees are equipped to work remotely. Among other things, staff need clear guidelines and access to the right technology.

If you provide an essential service, ensure you have met all the administrative requirements, including preparing signed letters for all affected employees certifying their status as essential workers, as per government regulations.

While there's still time, test the IT systems that you rely on when staff are working from home. A good way to do this is a trial run, with IT on hand to sort out technical issues.

Investigate the availability of government assistance (or assist others if you can!)

The president has announced a range of measures aimed at cushioning the economic blow inflicted by Covid-19.

This includes the establishment of a Solidarity Fund. Government will seed the fund with an initial R150 million donation. Otherwise, it will be constituted by contributions from the private sector. The fund will be applied to compliment government efforts to fight the virus and support those whose lives are disrupted.

Businesses interested in donating to the fund can find information at www.solidarityfund.co.za or by calling 0860 001 001.

The government also announced support for business, including:

A 'special dispensation' for SME's in distress due to the virus, including a temporary employee relief scheme under which the government will underwrite wage payments;Banks to be exempted from competition laws to enable a common approach to debt relief;Allowing tax compliant businesses to delay payment of 20% of PAYE liabilities over the next four months and "a portion" of provisional corporate income tax payments over the next six months;A temporary reduction in employer contributions to the Unemployment Insurance Fund the Skills Development Fund;A funding package of R500 million through the Department of Small Business to help SME's in distress; andA R3 billion package available through the Department of Trade and Industry to finance companies critical to fighting the virus. The president also held out the prospect of another raft of measures, labelling those announced on Tuesday night as "phase one".

If your business is affected, you should look into what support is available. If you're eligible, be sure to put in an early application.

Show staff and customers that you have a plan

As the Economist's Bartleby column pointed out this week, it's in a crisis that business leaders really show their mettle.

This is no time to hang back and hope for the best. You need to communicate clearly and proactively with both customers and staff.

Outline your plans to navigate the economic downturn and reassure both audiences that you have the financial capacity to survive. Staff, in particular, will be concerned. Some soothing words will help boost morale.

Prepare for uncharted territory

From an economic perspective, we are entering uncharted territory.

So far, governments have responded well. Major economies have announced substantial fiscal stimulus. Central banks are likewise using monetary policy to prevent capital markets freezing up.

But make no mistake about the challenge ahead. With commerce effectively shut down for a period that could last six months or more, the risk is that the global economy will spiral into a prolonged depression.

Individual businesses will experience a massive blow to revenues. As cash flow dries up, rents and wages will be just the first of many obligations businesses will struggle to meet.

It's in no one's interest for otherwise viable companies to go under. The only way this can be prevented is through a mixture of government support and cooperation between businesses and their financiers to defer obligations.

. Views expressed are her own.

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