Government moves to assure business sector of assistance after unrest
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The government yesterday moved to assure the business sector that it would pull out all stops to assist businesses affected by civil unrest to get the economy going again.
Minister of Trade, Industry and Competition (the dti) Ebrahim Patel outlined what the government will be doing to assist business with the reprioritised R2.3 billion relief package.
Patel said the government has in fact reprioritized nearly R4bn to help businesses affected by the riots and looting in KwaZulu-Natal and Gauteng two weeks ago.
He said the dti and the department of small business development had re-prioritised R1bn of funding from other programmes that will be shifted to this response.
“This has been supplemented by R1.3bn the National Treasury will make available,” Patel said.
“The Industrial Development Corporation has earmarked R1.4bn from re-prioritised funds and the National Empowerment Fund will put in R200 million, which makes available R3.9bn.
“We expect this to increase further to above R4bn with support from other entities we are engaging with.”
Patel said this funding would be used for a variety of purposes, including bridging finance while businesses await long-term funding, and also supplementing the State insurance payouts.
He said businesses could also use the funds as a source of working capital, to procure raw materials and equipment, stock replenishment, and make small-scale repairs.
At least 161 shopping malls, 11 warehouses and eight factories were looted and vandalised. Damage to property and equipment in eThekwini alone is R15bn, constituting about a third of the overall damage.
Patel said his department had prioritised re-establishing supply lines in the economy as quickly as possible, addressing the loss of wages and rebuilding investor confidence.
He said they were involved in repairing businesses, and speeding up construction and structural repairs.
The dti conducted site visits in both provinces, including Soweto, Tembisa, Mamelodi, iSithebe, Mandeni and Canelands.
The government has also met with global companies, business organisations, lobby groups, workers’ unions, and international investors to assess the scale of the damage.
Patel said a survey of just over 1 000 companies showed that 68% of the businesses affected were in KZN, with 10 200 jobs affected by the unrest.
Patel agreed with Finance Minister Tito Mboweni that social unrest would dampen business confidence, reducing private investment and future economic growth.
“The scale of destruction we witnessed has knocked confidence in a number of ways and we had to go out and engage with business to restore confidence,” he said.
“I want to emphasise that a lot of the support will be non-financial. We will assess each company’s needs and respond according to what they need best.”
BUSINESS REPORT ONLINE