The influence of COVID-19 on the productivity of small and medium enterprises : a case study of Mtubatuba Local Municipality

Abstract

Despite multiple calls for interventions in rural businesses, the productivity shocks experienced by rural SMEs from the COVID-19 pandemic remain inconclusive, thus spurring attention from researchers. Although many studies were carried out on the COVID-19 pandemic and SMEs in South Africa, a large portion concentrated on urban areas, but overlooking rural areas. The dire need for empirical studies, particularly in the confines of South African rural SMEs, cannot be overemphasised. Hence, the current study sought to investigate the impact of COVID-19 on SMEs’ productivity in Mtubatuba Local Municipality. The study employed a descriptive research design and a quantitative research approach, in which a closed-ended structured questionnaire was utilised to solicit data from a sample of 187 respondents from Mtubatuba Local Municipality. The collected data was analysed using the Statistical Package for the Social Sciences version 29.0 and Microsoft Excel. The findings revealed that the COVID-19 pandemic had a multifaceted impact on SMEs in Mtubatuba Local Municipality, measured using the Relative Importance Index and Relative Severity Index, which categorised the various factors into financial impact, operational disruptions, inventory and supply chain challenges, and workforce issues. In addition, the findings indicated that SMEs in Mtubatuba Local Municipality seized the opportunities presented by the pandemic and adjusted their businesses through selling ondemand products such as airtime, traditional medicines and herbs, headache pills, and adapting to internet and social media marketing. Using the Relative Importance Index and Relative Severity Index, the study demonstrated that high absenteeism rates and financial strains severely affected SMEs. The study recommended that SMEs should formalise their businesses; have insurance; invest in alternative means of productivity such as internet use; adopt remote and hybrid working; set aside emergency funds; and adhere to health and safety guidelines.