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03 August 2021 | Story Prof Brownhilder Neneh | Photo Supplied
Prof Brownhilder Neneh is an Associate Professor and Academic Head (HOD) of the Department of Business Management, University of the Free State.

Opinion article by Prof Brownhilder Neneh, Associate Professor and Academic Head (HOD) of the Department of Business Management, University of the Free State.


South Africa was recently rocked by the worst violence, riots, and chaos that has devastated the business community. An estimated 40 000 businesses were affected, costing the country about R50 billion in lost output and endangering around 150 000 jobs. It is important to stress that the situation regarding riots and looting in South Africa is not a once-off phenomenon, because in the past few years, South Africa has witnessed rioting and looting as one of the reoccurring events happening in the country, which often left big and small businesses to bear the burden as they pay the price for the actions of angry citizens. The aftermath of the Zuma imprisonment has once again put immense pressure on small and big businesses that were already disproportionately struggling with decreasing revenue and dismal forecasts of earnings due to the continuing COVID-19 pandemic and lockdowns. The losses have had a devastating effect on particularly small businesses, which are typically not insured against damage during protests, and do not have much cash reserves at their disposal. Some small business owners’ years of hard work and entire life savings were completely wiped out overnight, putting the reopening plans of some on hold and completely shutting down others. 

Given that riots and protests are not unusual in South Africa, some people on social media have argued that South Africa is a volatile country when it comes to riots and protests, and that small businesses should have anticipated such risks and should have made an effort to obtain business insurance. A critical question to ask is whether all small businesses can afford insurance? In most cases we expect the answer to be ‘no’. This is because small businesses operate under various difficult circumstances, such as liabilities of newness, smallness, poorness, and lack of access to external financing. Nonetheless, it is important to educate small businesses about the importance of getting insurance, especially any form of insurance that covers their core assets.  But more importantly, what needs more insight within the South African context, is a critical discussion on how small businesses can minimise losses incurred during riots and bounce back from external shocks.

Many uninsured small businesses might not reopen unless government helps them

Depending on the extent of the damage across the different businesses affected during the recent protests, it could take up to 18 months to reconstruct the malls and for businesses to become fully operational again. This means that many of the small businesses might have to temporarily change their business location or relocate completely. The major problem with this strategy is the risk of paying double rent, both to the damaged mall as well as at the new location. The law does not provide for these SMEs to stop paying rent to the damaged mall, regardless of whether they want to relocate.  In addition, most of the assets that these businesses had, such as furniture, equipment, inventory, and debtors, were destroyed. This is a double negative, which implies that they have lost almost all of the assets they could use as collateral to obtain loans from financial institutions, as well as having to replace these assets.

Many of these small businesses that were not insured and have very little or no cash reserves may not be able to reopen their businesses, unless they receive assistance from the government. The South Africa government and the entire civil society have come out to condemn these barbaric actions, and have put in place some measures to redress the situation and bring stability to the country. As part of the recovery strategies, the government funds allocated to small businesses through its different departments, such as provincial development corporations, the IDC, and national youth funds, should be used to provide interest-free loans to those small businesses that were profitable before the looting crisis. Government should also consider paying business rentals to the damaged malls until these malls reopen.  Tax incentives for some of these businesses for a certain period of time is another option to be explored. Likewise, unemployment funds should be made available to pay their employees until they are fully operational again.

Within the context of entrepreneurship, resilience – which is viewed as the capacity of the business to recover, survive, or grow quickly following a crisis – is one of the capabilities that small businesses can deploy. While small businesses are often regarded as less resilient because of their limited resources, this liability makes them more flexible and adaptable in the face of adversity. Small businesses can become more resilient and less vulnerable to crises by developing an anticipated and containment mindset. An anticipated mindset entails continuous identification of all possible problems and emergencies, while a containment mindset is about embracing flexibility and adapting when responding to crises (conceptual slack), developing capabilities to deal with losses, and making a commitment to resilience. Small businesses can achieve these mindsets by undertaking training in metacognitive awareness, which entails developing coping strategies to respond to uncertain events, developing adaptive thinking to identify and recognise opportunities in an uncertain and dynamic context, and changing responses and strategies according to changes in the environment. Small businesses can also develop resilience by investing in and building resources. These resources can range from social resources (e.g., support from networks of family and friends, business partners); economic resources (e.g., personal savings, stokvels, and financial institutions); and personal resources (e.g., self-determination, inner strength, adopting a problem-solving mentality, emotion regulation, and self-confidence). As a short- to medium-term strategy, the South African government – through its Ministry of Small Business Development – should partner with higher education institutions and private organisations to create nationwide workshops and seminars on how to develop resilience and overcome liabilities of newness, smallness, and poorness.

Small businesses are the panacea for addressing poverty, unemployment, and inequality

Small businesses should also foster cooperative relationships, as these have proven to help entrepreneurs overcome the lack of resources by sharing business resources (equipment, business space, and funds). This ultimately transforms competitive differences into potential growth opportunities for businesses. This is one of the most important business practices adopted by many immigrant businesses for survival. Those who need to start from scratch are encouraged to develop their businesses, using what they can create with the set of resources (computer, land, skills, money, car) at their disposal, no matter how small. Given that the future is unpredictable, instead of defining a specific plan to reach a goal/objective, such entrepreneurs should focus on what means are available to them now. Most successful entrepreneurs around the world – and particularly in Africa, where entrepreneurs are usually constrained by limited resources and support structures – will tell you that they started their businesses with very limited or only one resource that they had at their disposal. It might be quite difficult and painful to undergo the cycle again, so entrepreneurs should tap into their inner grit and remember that although they are starting from scratch, this time around they are wiser and more experienced, which will ultimately translate to higher achievements. 

In conclusion, small businesses are the panacea for unleashing and addressing the triple problem of poverty, unemployment, and inequality that South Africa is currently facing. So, if the government is intentional about enhancing the creation, survival, and sustainability of small businesses, it becomes critical that they create an enabling environment that significantly minimises external shocks. The South Africa government should also put in place clear short- and long-term goals to address the causes and issues that give rise to riots and provide practical solutions to transform the country. The South Africa government should also partner with civil society and the media to spread awareness about the negative impact of destructions during riots and protests.

News Archive

Bloemfontein's quality of tap water compares very favourably with bottled water
2009-08-04

The quality of the drinking water of five suburbs in Bloemfontein is at least as good as or better than bottled water. This is the result of a standard and chemical bacterial analysis done by the University of the Free State’s (UFS) Centre for Environmental Management in collaboration with the Institute for Groundwater Studies (IGS).

Five samples were taken from tap water sources in the suburbs of Universitas, Brandwag, Bain’s Vlei, Langenhoven Park and Bayswater and 15 samples were taken of different brands of still and unflavoured bottled water. The samples were analysed at the laboratory of the IGS, while the interpretation of the analysis was done by the Centre for Environmental Management.

“We wanted to evaluate the difference in quality for human consumption between tap water and that of the different brands of bottled water,” said Prof. Maitland Seaman, Head of the Centre for Environmental Management.

“With the exception of two samples produced by multinational companies at their plants in South Africa, the different brands of bottled water used for the study were produced by South African companies, including a local small-scale Bloemfontein producer,” said Prof. Seaman.

According to the labels, the sources of the water vary from pure spring water, to partial reverse osmosis (as an aid to standardise salt, i.e. mineral, content), to only reverse osmosis (to remove salts). (Reverse osmosis is a process in which water is forced under pressure through a pipe with minute pores through which water passes but no – or very low concentrations of – salts pass.)

According to Prof. Seaman, the analysis revealed some interesting findings, such as:

• It is generally accepted that drinking water should have an acceptable level of salt content, as the body needs salts. Most mineral contents were relatively higher in the tap water samples than the bottled water samples and were very much within the acceptable range of drinkable water quality. One of the bottled samples, however, had a very low mineral content, as the water was produced by reverse osmosis, as stated on the bottle. While reverse osmosis is used by various producers, most producers use it as an aid, not as a single method to remove nearly all the salts. Drinking only such water over a prolonged period may probably have a negative effect on the human physiology.

• The pH values of the tap water samples (8,12–8,40) were found to be slightly higher (slightly alkaline), like in all south-eastern Free State rivers (from where the water is sourced) than the pH of most of the bottled water samples, most of which are sourced and/or treated in other areas. Two brands of bottled water were found to have relatively low pH levels (both 4,5, i.e. acidic) as indicated on their bottles and as confirmed by the IGS analysis. The health implication of this range of pH is not significant.

• The analysis showed differences in the mineral content given on the labels of most of the water bottles compared to that found by IGS analysis. The possibility of seasonal fluctuation in content, depending on various factors, is expected and most of the bottling companies also indicate this on their labels. What was a rather interesting finding was that two pairs of bottled water brands claimed exactly the same mineral content but appeared under different brand names and were also priced differently. In each case, one of the pair was a well-known house brand, and the other obviously the original producer. In one of these paired cases, the house brand stated that the water was spring water, while the other (identical) “original” brand stated that it was spring water treated by reverse osmosis and oxygen-enriched.

• Nitrate (NO3) levels were uniformly low except in one bottled sample, suggesting a low (non-threatening) level of organic pollution in the source water. Otherwise, none of the water showed any sign of pollution.

• The bacterial analysis confirmed the absence of any traces of coliforms or E.coli in any of the samples, as was also indicated by the bottling companies. This is very reassuring. What is not known is how all these waters were sterilised, which could be anything from irradiation to chlorine or ozone treatment.

• The price of the different brands of bottled water, each containing 500 ml of still water, ranged between R3,99 and R8,99, with R5,03 being the average price. A comparison between the least expensive and the most expensive bottles of water indicated no significant difference in quality. In fact, discrepancies were observed in the most expensive bottle in that the amount of Calcium (Ca) claimed to be present in it was found to be significantly different from what the analysis indicated (29,6 mg/l versus 0,92 mg/l). The alkalinity (CaCO3 mg/l) indicated on the bottle was also found to differ considerably (83 mg/l versus 9,4 mg/l). The concentration of Total Dissolved Salts (TDS) was not given on the product.

“The preference for bottled water as compared to Bloemfontein’s tap water from a qualitative perspective as well as the price discrepancy is unjustifiable. The environmental footprint of bottled water is also large. Sourcing, treating, bottling, packaging and transporting, to mention but a few of the steps involved in the processing of bottled water, entail a huge carbon footprint, as well as a large water footprint, because it also requires water for treating and rinsing to process bottled water,” said Prof. Seaman.

Media Release
Lacea Loader
Deputy Director: Media Liaison
Tel: 051 401 2584
Cell: 083 645 2454
E-mail: loaderl.stg@ufs.ac.za  
3 August 2009

 

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