Lockdown: 50% could go bankrupt within three months – Sakeliga poll
20 May 2020
More than 50% of the 706 respondents taking part in the business group Sakeliga’s latest Covid-19 business impact poll during the first part of May indicated that their businesses could go bankrupt within three months if the lockdown is continued in its present form. In addition, more than eight out of every 10 respondents expected enormous declines in the total sales (turnover) of their businesses. Almost 82% of the participants expected declines of 25% or more for 2020. About 48% of respondents said very little could be done to limit the damage.
Although lockdown rules have been relaxed from level 5 to level 4, almost five out of every ten businesses still are not allowed to resume their activities. Furthermore, about eight out of every ten participants that currently are in operation reported in May that necessary inputs to activities were much more difficult or somewhat more difficult to obtain than prior to the introduction of the Covid-19 restrictions.
“The economy is a whole with interwoven chains of serviceability and interdependence. As we expected from the onset, the current lockdown rules, including the controversial permit and licencing conditions, are even hampering the activities of the so-called essential and newly permitted enterprises," says Gerhard van Onselen, senior analyst of Sakeliga.
According to Piet le Roux, chief executive of Sakeliga, this business group will soon be appearing in the High Court to have a broad range of licensing conditions set aside that have been introduced in the course of the state of disaster, and also to protect businesses, non-profit organisations and employees against unlawful obstruction and arrest.
Sakeliga emphasises that the country cannot afford that businesses that want to resume their activities be hampered any longer. The results of the latest poll underline the urgency of the matter.
Not only did a majority of the participants in the poll indicate an acute deterioration in their immediate business conditions as against a previous seven days (at the time of the survey), but more than a third (36%) of the respondents expected that prospects would not improve over the next 12 months. This compares to less than 22% who thought that prospects would improve over the next 12 months. Furthermore, there was serious uncertainty regarding the future among the respondents.
Sakeliga has called on business communities and the public to pledge their mandate and support for the court case on Sakeliga's website.
Sakeliga’s complete report may be read here.
Background
A total of 706 respondents took part in the third Covid-19 poll in May 2020. The questionnaire was distributed by email among Sakeliga’s members and wider network.
The questionnaires were completed during the period of 6 to 11 May 2020. Most of the respondents were from Gauteng and the Western Cape.
About seven out of every 10 respondents were from small businesses with fewer than 10 employees. More than nine out of every 10 respondents were from businesses with fewer than 50 employees.
Issued by Gerhard van Onselen, Senior Analyst: Sakeliga, 20 May 2020
