COVID-19 Aid for Black Businesses

COVID-19 Aid for Black Businesses

Black businesses in South Africa have benefited from a number of measures the South African government has put in place. From the much-contested BEE, to the revised B-BBEE – there is a clear effort being made to help previously disadvantaged groups. While there is still plenty room for amendment, the bill has helped many black-owned businesses and pushed other enterprises to empower marginalized groups.

Black Bbusinesses COVID Aid NEF brochure

In response to COVID-19, R200 million in funding for black enterprises was allocated the National Empowerment Fund. The funds were meant for companies to buy equipment and machinery necessary to help during the COVID-19 disaster. As detailed in a brochure by the NEF, successful applicants were to receive between R500 000 and R10 million. They were to provide essentials such as face masks, toilet paper, disinfectants and more.

The Unfortunate Shortcomings for Informal Traders

Informal traders, who mostly operate with no formal licencing, have not had much luck as far as funding is concerned. Informal work relies heavily on daily income in order to be profitable. We can argue that all businesses function this way. But with the significantly low profits typical of this type of work, the daily income received is often enough to carry an entire family for only a single day, give or take.

Informal Traders South Africa

The lockdown has meant this disenfranchised sector has suffered as they are unable to function any way other than physically. Many have criticised the government for its failure to envisage the effects of the lockdown on informal entrepreneurs. While their response to supporting formally registered entities, large or small, has been quick and somewhat effective, vulnerable income groups have been left with no plan for aid.

However, a large number of people that work informally function under no contracts, do not pay taxes, and thus have no tax number or UIF. This has made designing an appropriate relief scheme impossible.

Special Social Relief

While there is little to no hope of getting informal businesses opening soon, there is some relief for citizens. The South African Social Security Agency (SASSA) has opened applications for the Special COVOD-19 Social Relief and Distress Grant.

The R350 social grant is meant for groups that do not receive any other form of aid; be it the NSFAS stipend, UIF or the other various social grants available to citizens. It has been met with some criticism but represents an ounce of hope for people that have been unable to receive any form of financial assistance.

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