South African businesses say that ‘essential vs non-essential’ is not working – here’s what to do instead

South Africans businesses continue to bear the brunt of an extended lockdown and are concerned that the latest regulations are insufficient for the resumption of safe operations and public well-being, says business body, Sakeliga.

The group said it conducted a poll of 400 companies after the latest lockdown regulations were announced on Thursday (16 April).

The poll showed that three quarters of businesses indicated that they now expect their 2020 turnover to drop by more than 25%. In addition, 40% indicated that they do not see a way of recuperating their losses.

Of the businesses that qualified as “essential”, 83% indicated that they experience increased difficulty in obtaining inputs from upstream providers, with 55% indicating severe difficulty.

One of the biggest points of contention is around what businesses are declared ‘essential’, with Sakeliga arguing that prohibitions on services such as community neighbourhood watches, regular informal food trading, and e-trade are ‘patently harmful’.

“The current distinction between essential and non-essential businesses is only one of many ways in which to deal with public health risk,” said Piet le Roux, chief executive officer at Sakeliga.

“While intuitive from a policy perspective, its practical effects are now clear: to try and define what is essential and not is to create a maze of uncertainty and delays, which brings its own public health consequences.”

“Currently, virtually every business activity that is not specifically allowed is prohibited.”

While Sakeliga noted that there is no lack of goodwill from businesses to voluntarily comply with requests and guidelines, there are concerns that companies are faced with an ever-changing, unclear and semi-permanent regulatory framework for the economy.

“It is a mountain that especially small and medium-sized business will not be able to climb,” said le Roux.

“It will obstruct thousands of businesses whose operations pose no additional health risk with prohibitions, paperwork requirements, and policy-lags.”

Alternative 

Instead of following the current essential vs non-essential business model, government should look at allowing companies to operate based on a risk-assessment, le Roux said.

Government could then effectively focus on companies that are seen as ‘high-risk’ vs companies that are seen as ‘low-risk’, he said.

“All businesses could continue as long as they make sure that their operations are adjusted for health risks.

“Regulators then focus on identifying and defining risky operations which need to be changed, instead of identifying businesses that should be open or closed.”

Sakeliga said that the attractiveness of this approach is that it could boost both public health and social and economic stability.

“It would also be much easier to understand and support, because the regulatory focus falls on defining what is not allowed, instead of defining what is allowed – as the case should be in a free society,”  said le Roux.


Read: You will now need this new certificate to stay open as an essential service during South Africa’s lockdown

Must Read

Partner Content

Show comments

Trending Now

Follow Us

South African businesses say that ‘essential vs non-essential’ is not working – here’s what to do instead