Financial Risk Management expert, Adedipupo Osinloye (Dipo) believes that though COVID-19 dealt a huge blow on South African businesses, as it did all over the world, though extreme, yet not a totally fatal one. He posited that there is hope of redemption and businesses in South Africa can build the requisite capacity to survive in the post-Covid world if given the necessary support in terms of knowledge (know what), skill (know how) and attitude.
According to him, the ongoing Covid-19 pandemic is causing untold human suffering across Africa and is likely to leave an indelible impact on the continent’s small and medium-sized enterprises (SMEs) in comparison to pandemic’s effects on big businesses. He defined SMEs as “separate and distinct business entities, together with their branches or subsidiaries, if any, including cooperative enterprises, managed by one owner or more, predominantly carried on in any commercial sector or subsector.” Specifically, he noted that his focus is on businesses with a turnover of more than 15 million but less than 500 million rand.
These businesses play an outsized role in the economy of South Africa and the African region at large and employ an estimated 80 percent of the continent’s workforce in both the formal and informal sectors. He however clarified that during times of crisis like the one we have experienced; these businesses are often the least resilient. He linked this to having limited cash reserves, smaller clientele bases, economic incapacity of clients to purchase and lower capacity to manage commercial pressures as opposed to their larger, more established counterparts. ‘Lack of Risk Management, Corporate Governance and Legal Structure in these companies win the trophy as the main causes of a lack of resilience in South African SMEs’, he suggested. He mentioned that he made sure to address these prevalent issues in his book: Current Trends in Corporate Governance: Leadership Perspectives, where he argued that it is possible for these SMEs to thrive and recommended growth lanes and ways to build structures.
Dipo noted that South African SMEs, already having to contend with a contracting economy, additional shocks from COVID-19 are putting further pressure on their operations. Lockdown measures have caused revenues in many SMEs to fall precipitously and the majority report that they are being forced to cut back on business spending to survive. SMEs are the lifeblood of South Africa’s economy and Africa’s by consequence —and the most at risk, he said.
He further noted that on the other hand, even with all these setbacks and decline in various aspects, humanity went ahead and even bounded together as we perpetuated the metaverse; though physically distant, we became closer digitally, thereby presenting a new dawn and new opportunities.
The South African based expert recommended some of the ways South African SMEs can go beyond surviving but even thrive post COVID in both his books on Corporate Governance and the other titled, Uncommon Strategies for the 21st Century Business. He noted that businesses must embrace technology in order to achieve borderlessness; seeking business promotions and partnership outside South Africa and the continent at large. He submitted that businesses must upgrade skill sets, improve sales methods, foresight, health and safety measures and access to markets in order to scale the current challenges in the post-Covid world. He strongly believes that with grit, right structures and the right support from government, South African SMEs will use these seemingly tough season as their launch pad to greater success.