The Impact of Covid-19 on the Small, Medium and Micro Enterprises sector in Cape Town, South Africa

Authors: Happyson Bimha and Primrose, Z.J. Bimha

1.University of Eswatini (UNESWA), Department of Business Administration, Faculty of Commerce, Kwaluseni Campus, Eswatini.
2.Department of Politics and International Relations, University of Cape Town (UCT), South Africa


Small, Medium and Micro Enterprises (SMMEs) promote employment and economic growth. However, survivalists who constitute the bulk of the sector are highly vulnerable to economic shocks owing to lack of strong capital, lack of skills and their informal nature. Based on qualitative interviews with 25 SMME representatives based in Cape Town, the study examined the immediate impact of the Covid-19 pandemic on SMME businesses in the city. Results show that SMMEs have been badly impacted and the situation could deteriorate further, leading to collapse and failure to reopen. During the Government-imposed lockdown, businesses that remained open ran out of stocks due to broken down supply chains whereas businesses that closed experienced stockpiling. The situation was aggravated by the fact that only VATcompliant businesses could benefit from rescue packages, yet many SMMEs are not formally registered. That notwithstanding, some businesses have repositioned themselves by replacing traditional face-to-face strategies with online strategies.