Private sector optimistic business will bounce back post COVID-19

No one knows clearly when the new coronavirus will be overcome because of its severity and lack of vaccines and therapeutics, thus businesses have continued to feel the pinch from the pandemic. However, there is optimism that business will reopen at the end of the day and economy recover given the mitigation efforts government has undertaken. The New Times spoke to Robert Bafakulera, Chairperson, Private Sector Federation (PSF), to get a sense of how businesses are coping with the pandemic and their prospects for recovery. “The most important thing is that people are around with knowledge and skills. Business will recover at the end of the day,” he said by phone. The private sector has also joined the government efforts towards donating food supplies, essential materials and supporting the most vulnerable families across the country. Latest statistics from PSF indicates that its members in Kigali alone have donated foodstuffs and cash worth Rwf560 million, and the exercise is ongoing. Here are some insights from Bafakulera; How have private businesses been affected by Covid-19? Businesses have been affected – whether trade, services and industries – but they have been affected differently because of the lockdown measures being implemented. When it comes to trade, this involves buying and selling of goods either in the country or across the borders. As you know, containment measures only allow trade in essential services. Therefore, those selling what have been classified as non-essential services, those that manufacture other products are highly affected by the pandemic. Even those that are trading in essential services are not selling at maximum capacities, because people are at home. People in services like tourism and hospitality are not working because people who buy these services are at home. Industries that produce essential products are working but at limited capacity because of the social distancing guidelines that only allow few people to work in those industries. Agriculture [which is an important sector], people are working but those who export agricultural products are facing challenges because of unreliable transportation. RwandAir is trying to help exporters to airlift their cargo to Europe and China. Even that is not very easy because when the plane goes it has to come back with other cargo, which is hard in this situation because of the lockdowns particularly in Europe. All in all, we have big hope because the control of coronavirus in Rwanda is very good and so we have seen not many cases as in other countries and the death rate is zero at the moment. We surely know the country will recover because people, business owners are there with the same knowledge and experience so they will work around the clock to revive businesses. Normally, we would lose more if a certain business manager or owner dies, but that’s not currently the case. Which members of PSF have been hit the most? Services, particularly hotels are the most hit because most of their customers come from outside Rwanda. An example is the people in ticketing, they have closed doors because there are no more airline travels. There are businesses that normally leverage working capital from banks who are now scared of repayment because they don’t have business and they have an obligation to pay banks. Are there businesses that have ventured into production of essential materials as part of the response towards coronavirus fight? There are businesses that are venturing into production of essential materials. We have one called AMG (Apparel Manufacturing Group) – a collective investment of about 40-50 people – have started production of masks. Pink Mango, another garment manufacturer, is in the process of setting up machines to start production of masks, gowns and other personal protective materials that are really needed today. There are currently like three companies exploring those options. What options are on the table for recovery of businesses? There are currently no options on the table but many businesses are monitoring the situation and contemplating on how to survive post coronavirus. The Government is also ready to support the private sector in this process. This could either be through a [dedicated] recovery fund that business owners can leverage to revive business. It is really a combination of things and there are many ways the private sector can be supported. We are exploring many options, either through banks subsiding loans, issuing overdrafts, etc. The support could also be through special facilities from the Government or grants.

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Private sector optimistic business will bounce back post COVID-19