Despite the challenges posed by the Covid-19 pandemic and lockdown, South Africa’s small and medium businesses (SMBs) are optimistic – but there is a long-term jobs crisis looming.

These are among the findings from Facebook’s Global State of Small Business Report, compiled in partnership with the World Bank and the OECD. The survey polled 30 000 small business owners and employers in 50 countries to lay bare the scale of challenges small businesses are facing during the pandemic, and to understand their ongoing challenges and areas for further support.

Over 44% of operational SMBs on Facebook feel optimistic about the future of their business, with 42% of female led SMBs on Facebook (and 66% of male led SMBs) currently operational or engaging in revenue led activities.

However, among operational South African small businesses (SMBs) on Facebook, 45% expect cash flow to be a challenge in the next few months, while the same amount having had to reduce the number of employees/workers as a result of the Covid-19 pandemic.

Of those that are operational, 67% reported that their sales this year were lower than last year.

Digital continues to play a key part in the economic recovery of these businesses, with 59% of operational SMBs on Facebook reporting 25% or more of their sales were made digitally in the past month.

“Small businesses are the heart of our communities – from coffee shops, and bookstores to plumbers, taverns and graphic designers,” says Nunu Ntshingila, regional director of Facebook Africa. “But we know they are facing the challenge of a lifetime.

“These survey results further highlight what we are already seeing, that the Covid-19 pandemic isn’t just a public health emergency, but also an economic crisis that is hitting SMBs exceptionally hard, and one that collectively as a community we need to urgently address.”

The global survey also highlights that globally the tourism and hospitality sector worldwide has borne the brunt of Covid-19 related restrictions and reduced consumer spending – with around half of businesses in these sectors reporting that they have had to close.

Smaller businesses, those owned and operated by one person, have seen these closures at a greater rate than others, with globally 26% of SMBs reported that they had closed between January and May 2020 – over 50% in some countries.

Ntshingila adds: “Globally more than 160 million businesses use Facebook, Instagram, Messenger, or WhatsApp every month to reach their customers, sell their products or services and ultimately to grow. They are the heartbeat of Facebook’s community and since the early days of the pandemic we have taken steps to help them weather the storm. These are tough times for businesses all over the world, we would like to help with their recovery.”