The annual KZN Top Executive Breakfast took place on 12 May 2022 at the Durban ICC. The breakfast is an initiative of the KZN Growth Coalition, which is partnership between the KZN provincial government and the private business sector. Co-chaired by KZN Premier Sihle Zikalala and executive Moses Tembe, its primary function is to provide a top level platform for collaboration between business and government in order to drive investment and growth in the province.
Due to the economic and social impacts of the Covid-19 pandemic, the July 2021 civil unrest and most recently, the catastrophic floods in April, much of the Coalition’s current focus is on rebuilding investor and business confidence in the province. The emphasis is therefore on mapping a strategic plan of action that will enable the restoration of the businesses and business activity that were negatively affected in the course of the past two years.
The breakfast event was sponsored by Investec and was well supported, with more than 250 business executives and government officials in attendance. They included KZN Growth Coalition co-chairs Premier Zikalala and Moses Tembe; Ravi Pillay, KZN MEC for Economic Development, Tourism and Environmental Affairs; Julia Taylor, Regional Head: Investec Specialist Bank; Stavros Nicolaou, Group Senior Executive, Strategic Trade Aspen Pharma Group; and Nigel Ward, President of the Durban Chamber of Commerce and Industry.
In his address, Moses Tembe said that despite the devastation left by the July 2021 unrest, the province is still seen as a good place for investment, with projects worth billions of rand in the pipeline for KZN. He added that the opportunities for the province “far outweighed the challenges” and that the government was committed to working with business to rebuild the KZN economy.
Premier Sihle Zikalala said that what we are currently facing as a province is unprecedented. He reported that:
During the second week of April 2022, KwaZulu-Natal sustained devastating floods caused by inclement weather. To date, it is estimated that over 445 people have died, with 48 people still unaccounted for. No less than 7 639 people were affected, about 6 847 were left homeless and 43 were reported injured.
Greater eThekwini has been most impacted by this inclement weather and the floods have regressed the provincial economy further after the devastating looting and Covid-19. The estimated economic impact of the floods is around R20 billion which has affected both economic and social infrastructure.
A survey by the Department of Trade Industry and Competition (the dtic) shows that at least 826 companies were affected and the cost of the damages to the companies is estimated at R6.4 billion. The majority of businesses affected were in agriculture (22%) followed by manufacturing (12%).
Funding for Recovery
In order to fund the recovery of business the following funds are available:
· The KZN Department of Economic Development, Tourism and Environmental Affairs will reprioritise R67.5 million towards SMME/Cooperatives Relief which has been approved by Provincial Treasury. The Relief Fund will prioritise township and rural businesses and informal traders affected by the recent floods.
· The Department of Trade, Industry and Competition (the dtic) Infrastructure Support Grant which aims to provide 50% cost-sharing grant funding to SMMEs and large businesses affected by the floods for the reconstruction of physical and bulk infrastructure inside the premises.
· The dtic Working Capital Grant which aims to provide 30% cost-sharing grant funding to SMMEs and large manufacturing businesses affected by the floods. The support includes working capital shortfalls (excluding salaries) as a result of supply chain disruptions, which could result in delayed receipt of raw materials and subsequent cancellation of sales orders.
· The Manufacturing Competitiveness Enhancement Programme (MCEP) Industrial Loan Component seeks to assist SMMEs and large manufacturing companies affected by the floods through financing businesses that are not covered by insurance or funding the insurance cover shortfall. The fund offers an interest-free loan to affected businesses for the replacement of stock, machinery and equipment, refurbishment of machinery and equipment, fittings, shelving and/or storage facilities, commercial vehicles and material handling systems. It also covers information and communications technology equipment; and business development services which include costs for preparations for certification and pre/initial assessment costs.
· The Industrial Development Corporation’s Flood Relief Fund will assist companies affected by the floods through financing businesses that are not covered by insurance or funding insurance shortfall. Those companies that are fully insured may also be funded through Bridging Facility. The funds will be used to finance working capital shortfalls, buildings and/or building improvement and fittings for the affected premises. This will be done through debt, bridging finance and term-loans.
· The Flood Recovery Support Grant. Targeting businesses for inventory and based on invoices provide this support will be limited to 30 % of qualifying costs with a capped amount.
· The Infrastructure Fund provides grant funding to businesses affected by the floods for the reconstruction of infrastructure. The scope of the existing Infrastructure Programme which covers companies affected by the unrest will be broadened to include support to companies affected by the floods.
· Government has also set aside R500m for the Flood Relief Fund to help restore businesses, communities and livelihoods. This covers the recovery process and the rebuilding of affected infrastructure (roads, bridges, water supply, electricity, rail, and commercial buildings). The Fund is from R1 million as per the minimum funding amount and is capped at R60 million per applicant targeting companies within IDC mandate. Companies outside IDC mandate such as traders, retail, logistics, transportation, infrastructure and construction will be considered on a case by case basis with the funds limited to R10 million per strategic implementing partner (SIP) and R1.5 million per business.
· Small Enterprise Finance Agency Flood Relief which is aimed at providing financial assistance to formal small enterprises affected by the floods in KZN and EC during the floods. It seeks to help restore businesses, communities and livelihoods.
This is a full grant and is nonrepayable providing amounts between R10 000 and R2 million per applicant targeting non-insured and underinsured small businesses.
The fund will support small enterprises requiring funding for working capital such as (equipment (including stock), furniture and fittings, tools and machinery provided that this remains below the threshold).
Premier Zikalala paid tribute to the business community of our province and country for lending a helping hand in the relief efforts and initiatives aimed at rebuilding KwaZulu-Natal. He said, “We look to you captains of industry to ensure that we weather this storm and emerge out of it wiser, stronger, and more resilient.”
Stavros Nicolaou, who delivered the vote of thanks, called the KZN Growth Coalition a great initiative and applauded both government and business for continuing the partnership. “This coalition sends a strong message that problems can only be transcended if people work together – and walking the talk will make a difference,” he said.