BUSINESS NEWS - South African CEOs are urging businesses with small and medium enterprise creditors to pay them early this month.
The CEO Initiative, which was established in 2016 as a collaboration between government and business to address some of the most pressing challenges to the country’s economic growth, is supporting the call from Business for SA (BSA) for all large companies to pay their SME creditors by Monday April 20, 2020.
Sim Tshabalala, a member of the CEO Initiative SteerCo, and CEO of Standard Bank South Africa, says, these are extraordinary times that require extraordinary commitment from CEOs and large corporates.
“The government has asked South Africans to stay home under a 35-day lockdown. This is tough for every individual, and every business, but [particularly] difficult for small and medium enterprises.” Tshabalala says.
He says that small businesses are under “enormous strain” with many having to close their doors, which has a significant impact on their ability to sustain their employees.
“Even outside of the lockdown, many of these businesses often do not have the cash flow needed in order to maintain sustainability. We believe early payment is the right thing to do and will have a significant impact on their ability to survive and keep paying their employees,” Tshabalala says.
Adrian Gore, CEO of Discovery, who is also a member of the CEO Initiative SteerCo and chairman of the SA SME Fund, says SMEs are unable to pay their rent, utilities and staff during the pandemic, as a result of the lockdown.
Gore says there are approximately 525 000 formal SMEs in South Africa, employing around 6.6 million people.
He says a survey they conducted indicates that 60% of SMEs are either considering retrenching employees, or already have.
“This is a significant threat to the SA economy, with many millions of jobs at risk. We need to act boldly now and pay all outstanding SME creditors by Monday,” Gore says
Another member of the initiative, Nolitha Fakude, chairperson of Anglo American’s management board in SA says it is upon larger businesses to ensure that SMEs survive the pandemic.
“SMEs are the lifeblood of our economy. As big business, we have both a social and commercial responsibility to ensure that they are sustained during this time. We are committed to supporting the viability of SMEs across South Africa, and hope that business across [the country] will heed this call to action,” Fakude says.
