There’s panic in the air as warnings of a resurgence of Covid-19 infections become louder each day. To say small businesses are panicking is an understatement.
To be frank, we are defecating cement blocks at the prospect of the economy closing down again as we fear the prospect of a hard lockdown if a second wave becomes a reality.
The undeniable truth is that our government is inexperienced, ill-quipped and, frankly, inept when it comes to supporting small business growth and development, let alone rescuing businesses in the middle of a pandemic.
This is despite the existence of a whole department of small business development, apparently set up to anchor new and existing businesses to prosper and create jobs.
What we experienced from the so-called Covid-19 relief fund, if ever there was one, were flawed processes that were open to so much abuse that they led to many legitimate small businesses closing down.
For many of us who went through the terrible ordeal of begging for a lifeline from the Unemployment Insurance Fund (UIF), we have reasonable cause to seek therapy for post-traumatic stress disorder.
President Cyril Ramaphosa’s announcement of the R500 billion relief fund to help small businesses to hug the sharp curve sprung on them by an unprecedented pandemic calmed my anxiety that was caused by the fear of not operating and bringing in revenue.
What I experienced, however, reversed this emotional tranquillity almost immediately.
There were two main interventions put in place – one was the UIF Temporary Employer/Employee Relief Scheme (TERS) for businesses registered and paying UIF monthly.
The other was the department’s debt relief fund targeted at small and medium-sized enterprises that didn’t qualify for the TERS fund, but were operational and economically active before the Covid-19 outbreak.
Within a few days of the applications for relief funds opening in early April, I submitted all relevant business documents to the Small Enterprise Finance Agency (Sefa).
The agency had been tasked with facilitating the process of applying for financial help from the department’s debt relief funding programme.
It took a whole month to get an acknowledgement of receipt of our application, and then another month for a consultant to finally conduct due diligence on our application and process it for final authorisation by the powers that be.
After this process, we could access a six-month loan that would keep the lights on so we could live to see another financial year of tax returns.
At this stage, mind you, we were already two months behind on the office rental, telecoms costs, salaries and other general expenses.
Then, boom! The dreaded “send to all” email from Sefa on May 29 informing every poor, hopeful soul who had applied for relief that the rescue funds were depleted. But it wasn’t all doom and gloom.
In its own words: “The department of small business development has entered into an agreement with the UIF to ensure that small, medium and micro enterprises that previously did not qualify due to noncompliance can be covered by the UIF provided they agree to the terms and conditions under which UIF covers payroll benefits, which include an acknowledgement of debt as well as payment terms with the UIF.”
Naturally, like fellow entrepreneurs, I was gobsmacked as to who the lucky recipients of the now dry relief funds were as no one in our circles had received anything.
The UIF’s terms and conditions have always been clear: register and pay your monthly contributions to benefit from the fund in future.
It was therefore baffling how this agreement would materialise particularly for micro businesses that work with independent contractors, freelancers and consultants, and don’t have full-time staff members.
Not all hope was lost – well, I assumed that part. I started the UIF process and am still reeling with shock over what I experienced. The UIF, through its official spokespeople, vehemently denied any “agreement” had been entered into with the department. We had clearly been misled.
There was double-dipping by many businesses that benefited from the UIF and the department simultaneously, based on reviewed lists of beneficiaries from both entities, while scores of other businesses couldn’t access help at all.
Engagement with the department to enquire about the so-called agreement with the UIF and to alert them to the “water leak” where businesses were benefiting on both ends at the expense of the livelihood of others proved fruitless.
Emails, phone calls and WhatsApp messages were not responded to. Being ignored by government departments and state agencies, especially economic development agencies with the mandate and power to fund us, is not new.
Just go through the social media pages of institutions such as the Gauteng Economic Propeller and you will be shocked at how entrepreneurs are being ignored when they enquire about the status of their funding applications going back to 2018.
Anyway, if Covid-19 has taught me and other entrepreneurs anything it is the following:
- You will be ignored by government when you reach out via a landline call or on social media. Therefore, spare yourself from being a scefe (a nuisance) and seek help elsewhere. This is disheartening because these funds are made possible because we pay tax.
- Government has no interest in learning from its mistakes by welcoming constructive feedback on the shortcomings of its systems and processes.
- The department of small business development doesn’t have the capacity, knowledge and skills to operate efficiently during a pandemic, nor to handle high volumes of applications.
- Being an entrepreneur in South Africa is an extreme sport. Banks will decline a Covid-19 government loan scheme application that is already guaranteed by the SA Reserve Bank.
- There is no sense of urgency for government officials to assist businesses, and there is a lack of knowledge of the pressures entrepreneurs experience daily. Sefa, for example, can fund purchase orders but requires a four-week lead time for the process to unfold. The reality is that businesses are expected to deliver almost immediately after a purchase order has been issued.
I’m personally grateful for the reopening of the economy, which has led to our business finally fielding new briefs after a six-month hiatus and there is the prospect of more work.
It would devastate me and other businesses to go through the painful process of being short-changed by the department if there is a second wave of Covid-19.
So, I beg all South Africans, in the interest of saving jobs and sustaining businesses, let’s keep the masks on and constantly sanitise to minimise the risk of a spike in infections.
We don’t have a support system from government that can safeguard most businesses if we find ourselves in the Covid-19 waters again. It will spell certain death for our businesses that no R500 billion promise can resuscitate.
Mokabane is a marketing professional by day and a layperson in general