South Africa's small businesses hit hardest by COVID regulations: Study

A recent study revealed that coronavirus pandemic regulations have h a significant ecomic impact on small enterprises and informal sector in South Africa, with over 3 million jobs affected. study, titled " Impact of COVID-19 on Micro and Informal Businesses in South Africa," ted that COVID-19 pandemic and lockdowns were unprecedented, and have been termed as more devastating than financial catastrophe of a dece ago in country. informal sector, which accounted for 8% of South Africa's Gross Domestic Development and employed at least 27% of workforce, was hardest hit, found study which was conducted by Department of Small Business Development in collaboration with United Nations Development Program (UNDP). findings also revealed that micro and informal enterprises that reopened after lockdown was lifted were still far from regaining or achieving ir pre-pandemic income or employment levels.

study also ted that while pandemic h a devastating impact on many ecomic sectors, many or areas such as construction, hospitality, food and bever, also witnessed a greater fall. pandemic h a significant impact on women too, with many of m left jobless, according to report. Though government provided financial assistance to help reduce effects of pandemic, study found that it concentrated mainly on registered formal companies. tably, Small and Medium-sized Enterprises (SMEs) play a significant role in ecomies in Africa as y employ at least 80% of continent’s workforce in both sectors - formal and informal - but y are often found to be least robust during times of crisis. This is due to fact that y often have lesser cash reserves, client bases, and commercial pressure manment capabilities compared to larger enterprises, ted study. 

'Majority of small businesses forced to cut back on spending to survive'

findings stated that many small businesses in South Africa have seen ir earnings plummet as a result of lockdown measures, and majority have been forced to cut back on business spending to stay afloat. However, this may t be eugh for some, since ecomists expect that roughly 60% of SMEs will close before pandemic is completely over. According to study, country's micro-businesses were alrey facing severe challenges. A stagnant ecomy, combined with repeated downgres in credit ratings, has h a negative impact on SMEs year after year, and impact due to COVID-19 is likely to exacerbate se trends, claimed study. 

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