- World stock markets struggled generally, and world trade was under pressure following protracted trade disputes between The United States and China.
- Brexit is also not yet finalised and that continues to drag between the UK and the European Union.
- A sudden oil war broke out between the Organization of the Petroleum Exporting Countries (OPEC) and Russia about supply and pricing, with Saudi Arabia unilaterally announcing they will be increasing output and lowering prices, which created massive economic turmoil.
- As for South Africans, in the background news, we heard about this “thing called corona virus in China”, but did not really take note, until a lot of people started dying worldwide and government starting talking about “social distancing measures” and improved “personal sanitizing practices” .
- And then BAM! The SA Government announced a nationwide lockdown effective form the 26th March 2020 to the 16th April 2020. All businesses had to close, all employees to stay at home, and where possible, work from home. But normal commerce is not allowed to take place, unless you are regarded as an essential service, and that places a lot of businesses in danger of unable to pay staff or face complete financial ruin.
What are the implications? What mitigation measures are possible?
The implications are severe. From reports, South African The Reserve Bank painted a bleak picture of our economic outlook on Monday 6th April 2020, projecting that as many as 370 000 people could lose their jobs as a result of the lockdown. 1 600 businesses could go insolvent and the economy may shrink between 2% and 4% this year. This would mean a completely new economic reality for South Africa.
The Government has announced several initiates to assist:
- The Solidarity Fund to assist in the fight against the virus in SA.
- SMME Support when loans can be obtained to assist businesses.
- Temporary Employer Relief Scheme (TERS) which assists employers with wages for their employees where the employer is unable to pay full salaries.
All this uncertainty and confusion, leads to a lot of organisations not knowing what to do or they do not know what they can do to mitigate against the effects of not being able to trade? Do they retrench employees? Do they work short time? Do they apply for UIF? Do they apply for TERS?
This is where we can assist, by understanding what you would want to implement in your business and assisting you to get there by looking at the various options. And we will ensure whatever course of action you decide on, you do it legally and within the framework of ethical and fair employment practices.
If you need assistance, we provide a free 15-minute consult, to understand what you need and advise on the best way to get there.