Monday, April 22, 2024

Lights out, businesses on the verge of collapse

As economic engines begin to hum as businesses shift levers to adjust to trading environments under the scare of coronavirus, other sectors of the economy remain in the state of paralysis.

Once touted as the next big avenue of economic growth, the meetings, incentives, conferencing and exhibitions (MICE) sector has been decimated by the outbreak of the highly contagious coronavirus, sparking concerns whether the sector will ever return to its heydays as large gathering remain forbidden in efforts to curb the spread of the virus.

When Covid19, the disease caused by coronavirus, became a public concern in late January, governments across the world were thrown in a state of panic, closing down their borders and shuttering businesses to minimise movements in exercises that came to be known as lockdowns.

In the past six months, the disease has sickened nearly nine million people and killed over 400,000, continuing unabated as scientists and governments race against time to find a cure. Given the growing body of knowledge about the nature of the viral infections, countries have begun to slowly lift restrictions that were put in place to slow the spread of the disease.

For starters, it is now known that the virus is largely to spread fast in large crowds, forcing states to maintain measures that prohibit close interactions and large gatherings. This has been a death knell for the MICE value chain as the sector remains shuttered, leaving the service providers with almost zero revenue, piling costs and fears of massive retrenchments.

“We just come to the office every day, hoping that something turns up. But it doesn’t look good,” said Joe Manuel, the owner of Brave Heart Botswana, a major service provider of lightning, sound and stage solutions.

Manuel said there has not been business since the government decided to limit the number of gatherings, a development which led to major events being cancelled. Even more worrying, Manuel says there seems to be no ending in place due to how the virus spreads, ruling out the possibility of large events making a return until a substantive treatment is found.

“It is frustrating because there is not much that can be done to stimulate business activity in our line of work as that will involve allowing large events to take place,” he said. “My main worry is the number of jobs in the line and the uncertainty about the sector’s future as things are likely not to be same again.

Manuel is right to be worried. Most subsidies that were put in place by the government to cushion businesses are coming to an end this month. After announcing a lockdown that began in April, the Botswana government unveiled a P2 billion Covid19 relief fund which was used to subsidize wages for affected companies. The wage assistance program will cease in June, posing a major problem for companies that have no source of income as their sectors remain under lockdown.

“Though we are looking at other ways of diversifying our revenue streams, it is difficult under the circumstances. Everyone is caught up in this pandemic and has become difficult to meet to provide other alternative solutions,” said Manuel.

The future of the sector is also hanging in the balance as clients are changing their business practices, opting for alternatives that reduce contact meetings. In addition, companies’ balance sheets are being reconfigured to cover costs related to coronavirus disruptions, which means they have redirected funding from events related activities.

“I do not how long we can hang on without business coming our way. Our equipment is laying idle in the warehouse, while there are some costs to be met. I really don’t see a recovery this year and I wonder how the future looks like,” added Manuel.


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