South African businesses fret about virus fallout

More than 40 percent of South African companies fear they may not survive the coronavirus pandemic, an official survey said Tuesday, as the country struggled with a five-week lockdown.

The government statistics agency StatsSA found 42.2 percent of respondents indicated “they are not confident that their business has the financial resources to continue operating” throughout the pandemic.

The survey was carried out during the first two weeks of the lockdown.

It was published ahead of a national address on Tuesday by President Cyril Ramaphosa on plans to help businesses weather the impact of the pandemic.

The study sampled 707 companies, each with an annual turnover of at least two million rand (US$105,000 / 97,000 euros), covering a range of sectors from manufacturing and construction to utilities.

Asked how long their business couid continue without turnover, 54 percent of respondents said they could only survive for between one and three months.

Almost two-thirds believed the pandemic would have a “substantially worse impact” on their business compared with the 2008/9 financial crisis.

South Africa’s central bank has forecast that GDP in 2020 will contract by 6.1 percent, while the International Monetary Fund (IMF) has predicted shrinkage of 5.8 percent.

South Africa had already slipped into recession in the final quarter of 2019 and recently saw its credit ratings cut to junk status.

The country imposed a 21-day lockdown from March 27, which was then extended by two weeks until the end of April.