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Makhanda small businesses feel the pinch of the lockdown as business dries up

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It is no secret that the lockdown has negatively affected businesses and the economy as a whole. However, small businesses in smaller towns are feeling the pinch.

Rhodes University is the engine of Makhanda’s economy in the Eastern Cape and with the 7 000 students having gone home, no revenue is coming in.

The Chisanyama in Makhanda was a safe haven for students as they got a taste of a home-cooked meal away from home. Now, due to lockdown, it stands closed and empty.

The owner of the Chisanyama, Simphiwe Xako, says his business is suffering immensely.

“We did try to do deliveries, two Fridays back when the President announced Level 4, which means that restaurants can open but only do deliveries. But look, it’s very different. You do two or three deliveries a day. You spend about R300 on electricity. At the end of the day, you go home with R120. So, it is a massive loss.”

Some businesses even opted to close and leave the city.

Makana Municipal Mayor Mzukisi Mphahlwa says that delivering services has become a major issue.

“If the business can’t operate that means the business can’t get revenue, and if we can’t get revenue that means we can’t deliver the services. For example, we have been having a collection rate of 75% before lockdown. In April alone, it went to 55%. So, we lost a lot of revenue from the business during lockdown whilst we are expected to deliver services at 100%, which means more people are now unemployed. It means more people are hungry. So, while we have to deal with businesses losing out financially, we also have to deal with a municipality that doesn’t have resources.”

Various business forums have drawn up key tools that small businesses can use during this tough economic period.

Chairperson of the Makhanda Circle of Unity Local Economic Cluster, Graeme Holmes, says their best advice is for businesses to lean on and learn from each other.

“What I’ve found, observing different businesses in town, some have reacted very quickly. They have been able to transform themselves and be able to not thrive but certainly, get through this tough time. But many people are battling to adapt. But pre-COVID, we are never going back there. So, it is important that businesses draw upon others and have the necessary information.”

Business relief has been made available by government. However, the process is very long and tedious. With the help of the municipality, so far, 60 spaza shops and small businesses have received relief funds.

Below Economist Ndumiso Hadebe dissects the importance of the reopening of the economy:

Below are some of the regulations under Level 4: 

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