Small trade, foreigners in a funding fix

Zimbawean Bornwell Madambi has lived in South Africa for 12 years. He has worked his way up in the restaurant business, eventually becoming the owner of a restaurant in Rosebank after working there as a manager for three years.

He thinks the restaurant, when it reaches its potential, will bring in R2.5-million a year. He employs seven people: three South Africans, three Zimbabweans and one Mozambican.  

But those jobs are in danger, because his revenue is plummeting as a result of the Covid-19 lockdown. He took ownership of the restaurant when the first cases of the disease were picked up in South Africa.

Last week, when President Cyril Ramaphosa announced the national shutdown, he said small businesses would get financial assistance in a bid to keep their businesses afloat.

“As we marshal our every resource and our every energy to fight this epidemic, working together with business, we are putting in place measures to mitigate the economic impact both of this disease and of our economic response to it,” said  Ramaphosa.

Money would be spent to save lives and to support the economy.

But these measures do not yet include informal traders and businesses owned by foreigners, even though they contribute to the country’s economy.

Madambi says because business was bad in March, he is now scrambling for money to pay his workers. “The livelihoods of employees and ours as the owners are at stake.”

He says he emptied his pockets and secured a private personal loan to buy the business, but now his reserves have run out.

“I am sure there are  a lot like us who employ a few people, including South Africans, and cannot access any of the gazetted funds due to the criteria proffered,” he says.

“The banks by and large do not easily facilitate loans for non-citizens etc, yet we are all in a humble and small way trying to contribute to the economy and, moreover, to reducing unemployment.”

Under the Covid-19 support plans, the main preconditions for funding is that small businesses should be 100% South African-owned and their total workforce must comprise at least 70% South Africans. Government will also give priority funding to businesses that are owned by women, young people and the disabled. Small businesses must also be compliant with the South African Revenue Service requirements.

Akona Zibonti, an inequality campaign coordinator at Oxfam South Africa, says it’s unfair that certain businesses are excluded.

“I feel like as long as you are paying taxes and you are contributing a vast amount of money to the economy then you are entitled to whatever that country is offering, because you are contributing to the well-being of the economy. If they are bringing money to the economy, why are they not given the same courtesy as everyone else?”

Zibonti, who has worked with informal traders and smallholder farmers, says she knows the “pain and pressure” they are under daily to make a living and put food on the table.

She says that it is unfortunate that informal trade is not seen as a business in South Africa, but this explains why there is no strategy to help the sector out during the Covid-19 emergency.

The Mail & Guardian reported last week that some three million workers fall into the informal sector.

Zibonti says places like Yeoville in Johannesburg are the hub of informal business and it breaks her heart that people in such places will not have a source of income that is stable.

“That is very unfair,” she says. “It makes me question whether they care about the well-being of everyone in South Africa or they believe there should be a certain few that should be treated fairly.”

Tshegofatso Mathe is an Adamela Trust business reporter at the Mail & Guardian


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Tshegofatso Mathe
Tshegofatso Mathe
Tshegofatso Mathe is a financial trainee journalist at the Mail & Guardian.

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