More than 50% of iLembe businesses fear closure within 6 months, report reveals

Nearly half of the businesses within iLembe region could close their doors within 6 months if forced to continue operating under current Covid-19 regulations, a business confidence report warns.

The bi-annual iLembe Business Confidence Index (iBCI) released by the iLembe Chamber of Commerce and Enterprise iLembe this week forecasted a looming economic disaster for the region, with a quarter of the tourism sector reporting that it has 3 months left before closing, while more than half believed they might survive another 6 months.

With business confidence at an all-time low, Chamber of Commerce CEO Cobus Oelofse said a hands-on approach was needed now more than ever and government must come to the table.

Nearly half of the region’s retail businesses reported similar negative outlooks, saying they could survive for another 6 months.

While Covid-19 had a clear impact, businesses report that the pandemic only served to deepen existing issues of unemployment, dented growth potential, lack of service delivery, corruption, mal-administration and institutional incapacity.

None of the region’s sectors escaped unscathed and all fear impending doom.

The all-time low business confidence levels speaks to a larger looming issue of reduced investment, which in turn will affect social development and job opportunities in iLembe.

Business confidence in Mandeni, the manufacturing heartland of the district, dropped substantially.

Mandeni is home to the Isithebe industrial estate.

The municipal area which reported the highest business confidence was Ndwedwe.

Nearly three quarters of iLembe’s main business takes place in the KwaDukuza municipality, where overall the sentiment is negative.

“The sentiments expressed in the survey paint a picture of fading business resilience with pleas for assistance which will aid businesses in navigating the crisis, among other by rates concession, and considered tariff adjustments,” said Oelofse.

The festive season had little positive effect on the economy, with just over three quarters of businesses reporting a drop in seasonal trade.

The region’s tourism industry was hit hardest of all sectors.

“The pandemic is making unprecedented demands on business owners, managers and the teams that they lead. Equally, government must balance the management of the pandemic with the dire economic consequences of imposing further or extended restrictions on business,” said Oelofse.

Government might still come to the table. Business industries in liquor, hospitality and tourism are included in a list of industries set to benefit from an extension to the Covid-19 temporary relief scheme (TERS).

Details have not been revealed with the extension remaining subject to talks at the National Economic Development and Labour Council.

While the report shows some businesses may be stabilising, many others remain challenged and hope for continued government support but Oelofse said all these businesses remain anxious about the future.

The region also showed a significant, all-time low level of employment.

“New strains of the virus continue to emerge and the delayed start to a vaccine roll out represents serious threats to the business recovery timetable.”

If structural economic adjustments do not take place, the economy will continue to contract, and the local business climate will remain vulnerable, said Oelofse.