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Bleak future beckons for businesses after lockdown

by Staff reporter
14 Apr 2020 at 07:16hrs | Views
AS the 21-day lockdown continues with shops that sell non-essentials closed, there are concerns in the Gwanda business community that some of them might collapse while others might be left crippled.

The Government recently announced a 21-day lockdown in order to curb the spread of Covid-19, a global pandemic. During this period, shops that sell non-essentials have been ordered to remain closed. People have been banned from moving around unnecessarily and in addition have been urged to practise social distancing among other measures.

Small supermarkets have also been ordered to shut down leaving only big supermarkets open. Small businesses in Gwanda, which is the provincial capital of Matabeleland South Province, are starting to feel the pinch as remaining closed is costing them a lot of revenue.

Clothing shops, bars, bottle stores, hardware shops, shops that sell electronics, salons, tuckshops, bookshops, restaurants, vegetable markets among others have remained closed. Mrs Melody Mpofu who operates a clothing shop in the Gwanda CBD said last week that the situation was gloomy for her and she did not know how her business will survive after the lockdown. She said she was now forced to spend the money which she was supposed to use to buy more stock.

"As a business owner I earn a living by selling clothing items, which means that when my business is closed I don't make any money meaning I don't make any profits. We were informed that only big supermarkets that sell essentials were allowed to open during the lockdown and therefore my shop has remained closed.

"This lockdown set up is ideal for people who are formally employed and have a fixed salary which they receive every month. As for informal traders, this is a difficult time for us. I've finished all my profits and now I'm using money which I had set aside to restock to fend for my family. We're just one week into the lockdown and by the time it's over, I would've used up all the money. By the time I re-open I'll have limited stock in my shop with no means of restocking. The little money that I get from my sales each day helps me buy food for my family," she said.

Mrs Agnes Moyo, a fruit and vegetable vendor in the CBD said some of her products had gone bad as she could not sell them as the markets were closed. She said after the announcement of the lockdown was made highlighting that only those providing essential services would be allowed to operate, she assumed that vegetable markets would be regarded as an essential service.

Mrs Moyo said to her disappointment, they were informed that they had to suspend their operations. She said her chomolia, tomatoes, bananas, potatoes and avocados had now gone bad and she did not know how she would recover her stock.

Mrs Moyo said although a few people were buying products from her home, it was not enough to save her stock. She said her source of livelihood had been affected as the money she realised after selling her products was the money she used to put food on the table for her family.

Mrs Moyo said the lockdown meant that at the moment, she did not have a source of income.

Former Zimbabwe National Chamber of Commerce (ZNCC) Matabeleland South vice-president and business analyst based in Gwanda, Mr Nqobizitha Sibanda said there was need for quicker Government intervention to assist affected businesses.

"This whole situation is frightening because what we're mainly worried about are the after effects that the lockdown will have on the business community in Gwanda. The bulk of the businesses here were already struggling to meet their obligations such as paying rentals and salaries. Closing for just a day was going to have a huge impact on most businesses but now they have to remain closed for 21 days.

"We foresee a situation where businesses that are closed will struggle to recover forcing some to shut down indefinitely because the impact is huge. Soon, we'll reach the month end which means businesses will struggle to cover their operational and fixed expenses. Even after opening, some businesses will remain handicapped. The livelihoods of many people are hanging in the balance because of this situation," he said.

Mr Sibanda said it was critical for Government to intervene faster as performance and closure of small businesses would also affect other sectors. He said the economy of Gwanda was mainly anchored on small and medium scale enterprises and their downfall would affect the economy of the district and that of the province. He said some people were also likely to lose their jobs in the process.

Mr Sibanda said while big supermarkets were opened, they were somewhat dependent on small businesses that buy goods from them in bulk for resale. "Gwanda mostly has small businesses and they're the ones holding the economy of the area. If many businesses close or become crippled then the town's economy will be greatly affected because if businesses are not functioning they won't manage to pay rentals and (for) licences to the municipality thereby affecting their operations.

"The education sector will also be affected as parents won't manage to pay school fees. The impact is far reaching and will also affect other sectors. While big supermarkets are open, they need customers and in order for people to buy they must have a source of income and the people who have to buy from them will be handicapped. People need to sell their vegetables and wares in order for them to make purchases. We don't want to be faced with a situation where after the lockdown, people will exit business premises and leave them vacant," he said.

Recognising that the lockdown would pose obvious challenges on small businesses, the Government recently announced that it had set aside $600 million for cash transfers for vulnerable groups among them informal traders and SMEs. The ministries of Public Service, Labour and Social Welfare; Women Affairs, Small and Medium Enterprises, as well as local authorities have been working on a database for the affected groups.

"The Ministry of Public Service, Labour and Social Welfare is working with the Ministry of Women Affairs, Small and Medium Enterprises, local authorities and relevant associations to come up with the database of those affected by the 21-day lockdown," said the Ministry of Public Service in a statement.

"We are still in the process of compiling the lists. The disbursements are set to start soon. Once we have received the data and verified it, then we will start disbursing the grants."

Mrs Moyo and Mrs Mpofu stand a chance to benefit under the emergency fund. Gwanda Business Association committee member Mr Eggs Asima said his organisation is compiling a list of people that have been affected by the lockdown.

"This is a difficult situation because we've not experienced it before and we don't know how to go about it. We're in the dark and we don't know whether the lockdown will continue after 21 days or if it will come to an end. We're dealing with a pandemic which can spread even more or be contained so we really don't know what kind of situation we're dealing with.

"As a business community, we didn't have any contingency measures put in place for a situation such as this one and people are now starting to feel the effects of this lockdown. People have to pay Government taxes, they have to pay their loans but it will be impossible considering that they're not working. As a business association, we're in the process of compiling a list of people that have been affected with the hope that there'll be intervention," he said.

Mr Asima said the situation was also difficult for big supermarkets that were open as their working hours had been reduced and they had a limited number of customers due to the lockdown. Mr Asima who operates a butchery and restaurant in the mining town said he was operating the butchery only leading to a loss of revenue.

Ministry of Industry and Commerce Matabeleland South provincial deputy director, Mr Richmond Ncube said loss of business and revenue was a challenge that was being faced by businesses throughout the province. He said bars, clothing shops and other shops that don't sell essentials were the hardest hit.

Source - chronicle