Resilience is key to business success
South African businesses have faced some severe challenges in the last two years, but many have survived and even grown. Perhaps one the most valuable lessons learned during this time is the need to be resilient. As much as healthy finances and a skilled workforce are essential, resilience helps companies survive in tough times.
Gary Epstein, MD of EasyBiz Technologies, the authorised QuickBooks Online partner in South Africa, talks about the positive developments in the country, and how South African businesses can turn adversity to advantage.
SA’s growth on an upward trajectory
After a tumultuous economic journey from 2020 until now, no one could have blamed us if we’d become less than optimistic about the future of business. However, on a surprisingly positive note, the South African economy has recovered quicker than predicted. It is now expected to grow by 5.1%, from a 6.4% contraction in 2020. Revenue for 2021/22 is now estimated to reach R1.5 trillion. This is an upward revision of R120.3 billion.
Hauling in the tax net
The 5.1% growth rate, as reported by our new Finance Minister, Enoch Godongwana, in his mid-term budget speech, will affect all business positively, as will the temporary tax relief that is planned, and the more rigorous tax collections that are expected, to ensure that everyone is paying what they should.
Good for business
Also important is that the COVID-19 restrictions have been lifted to a degree. This will certainly cause interest rates to come down and commodity prices to go up, which is always good for business. While some COVID-19 restrictions remain, the most resilient businesses have adapted by putting the necessary protocols in place to keep their operations moving.
Lighting the way
While there has been much discussion about the reappearance of loadshedding, the good news is that amended regulations will further enable municipalities to self-generate or procure power directly from independent power producers (IPPs). With IPPs enabled to supply energy to the grid, a part of Eskom’s burden will be lifted, which will in turn relieve some of the burden on businesses and citizens.
Fueling the job train
The use of IPPs has another advantage in that it will help to create jobs. This, together with the 2022 Budget allocation of almost R74 billion towards public employment programmes, means that job-creation will be receiving more attention. In 2020/21, government spent R44.7 billion on education, which increased to R56.8 billion in the current year. Over the 2022 period, funding for higher education will total R158.8 billion. This will contribute to creating a skilled and employable future workforce.
SASRIA to the rescue
While the riots and looting in July this year put severe strain on the economy, many businesses were able to rally by applying to the government for pay-outs from the South African Special Risk Insurance Association (SASRIA). Again, businesses proved their resilience in the face of adversity to keep going and keep contributing to the economy.
Building the future
Further growth for the country will be seen in the planned infrastructure projects, 62 of which were gazetted in 2020. An additional 55 new projects from various sectors, valued at around
R595 billion, have been unveiled. Government has committed to allocating R100 billion to The Infrastructure Fund over a decade from 2019/20. This will significantly benefit business and the economy and will contribute considerably to job-creation.
In the midst of challenges, South African businesses continue to be resourceful in overcoming these hurdles. This can only stand them in good stead for achieving business continuity and growth. Many positive developments are taking place in the country, but when difficulties arise, South African companies know how to weather the storms and apply their infinitely valuable skill of resilience.