LETTER: Sensible interventions can save firms
Nothing can prevent the economic tsunami that lies ahead – but there are pro-bono, home-grown and practical interventions available to businesses that find themselves in distress
Finance minister Tito Mboweni said in his emergency budget last Wednesday that SA will need to borrow $7bn to cover its budget deficits in the tough years ahead. He has warned that we will have to allocate just under a quarter of our future tax revenue towards servicing the grand debt we are amassing.
Nothing can prevent the economic tsunami that lies ahead — but there are pro-bono, home-grown and practical interventions available to businesses that find themselves in distress.
The Cobra Initiative, for example, is a local not-for-profit body seeking to help alleviate some of the struggles businesses in SA face. It assesses what form of assistance each individual business needs and then develops practical steps for its survival.
This approach confronts the fact that not every business will still exist after this crisis — and that businesses facing demise should fold quickly to protect their underlying assets as a resource base to start something new.
In some cases, businesses might have to mothball operations, hibernating while the virus spreads. Others will survive by pivoting their offerings towards new market opportunities.
Mboweni said an "active approach" could lead to the creation of jobs and a reduced cost of doing business — which would help SA build a new competitive economy.
With a robust strategy to tackle the road ahead, there are glimmers of opportunity. Businesses can find stability and growth despite the dire economic outlook and narrow gate ahead.
CEO, IQbusiness, Joburg
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