Some of the economic effects of Lockdown are known. South African debt has been downgraded. The world faces a double-digit contraction in GDP. Marginal mines, restaurants and airlines are unlikely to recover. For some companies in other industries like Dion Wired and Edgars, the Lockdown will be the last straw.
However, COVID19 will pass. From the rubble, new winners will emerge. Policy will shift to stimulate growth and get people back to work. The SARB has already embarked on novel mechanisms to pump liquidity into the economy. It is reasonable to expect infrastructural projects to be ramped up to kick start the economy and get people back to work.
Opportunity exists in times of turmoil rather than in times of stability. This is because in times of flux, being adaptable is more important than being big. The winners will be companies that make the changes necessary to qualify for incentives or gain advantage in tenders.
South Africa’s bias is predictable. Benefits and tenders will flow to companies that are empowered.
This will not just effect companies that require licenses or public sector contracts. Lockdown has increased the pressure on all companies. Lockdown will not delay your client’s Verification Date but it will compress the time they have to achieve their empowerment goals.
This means that empowered suppliers will be in greater demand than ever before.
Market conditions were not easy before. It is a sure bet that we will emerge from this crisis into an economy that is even more challenging.
Use the lockdown to explore.
Competitive advantage is not given, it is taken. In South Africa, B-BBEE is that competitive advantage. Quiver Tree understands this advantage and how to deliver it in a way that will be acceptable to your foreign shareholders.
Call us to find out how.
