“There is something called the Queensbury Rule. You do not continue to beat up somebody who is on their knees. You do not. It is the rule. Civilized people abide by that Rule in business, sports, and politics. Rating Agencies should treat us the same way. During a global crisis!”



This was the response on Twitter of South Africa’s Finance Minister, Tito Mboweni on Sunday, November 21, after three dominant international credit rating agencies announced that the “outlook is negative” for the country.



American credit agencies, Fitch Ratings, announced on November 20 that South Africa&#8217;s Long-Term Foreign-Currency Issuer Default Rating (IDR) had downgraded to &#8216;BB-&#8216; from &#8216;BB&#8217;. Joining Fitch, Moody&#8217;s Investors Service (Moody’s) also announced on Friday that the country’s ratings had been downgraded from Ba1 to Ba2. This is in addition to S&amp;P Global Ratings status on the country in April 2020 when they downgraded the country’s credit ratings to BB- from BB.



What could this mean for South Africa in a year of the pandemic?



Professor Philippe Burger, Pro-Vice-Chancellor of Poverty, Inequality, and Economic Development at the University of the Free State in South Africa, says that the downgrade means that medium- to long-run interests will now be higher as opposed to what it would have been in the absence of a downgrade.



“That will affect everyone who needs to borrow, be it households or the government. It also means that to attract foreign investment into the country, we will have to offer more attractive returns on investment,” Burger adds.



The African Peer Review Mechanism (APRM), a specialized entity of the African Union (AU), noted that because this has happened twice now since the start of the pandemic, the “expectation that fiscal deficit will widen and government debt will rise.” Like many other countries, the Covid-19 pandemic has had a severe impact on South Africa’s economy. However, Fitch said that investment spending had already weakened in recent years in the country, falling last year to the lowest level in real terms since 2012. This reflects on challenges to the business environment such as the poor reliability of power supply, labor market inflexibility, and subdued domestic demand prospects. Although Moody’s said that the country had maintained a negative outlook in place since the beginning of November 2019, the South African National Treasury stated the Covid-19 pandemic hit South Africa at a difficult time. “Recent downgrades saw South Africa reaching its lowest credit rating levels from the ‘big three’ rating agencies since 1994. Economic growth has continued to decline irrespective of the attempts to reduce structural constraints,” the statement read on Saturday. Fitch further said that though President Cyril Ramaphosa announced an Economic Reconstruction and Recovery Plan in October, which focuses on boosting infrastructure investment, increasing energy supply, job creation, and re-industrialization, the country’s “track record” leaves nothing to be desired. “The track record of implementation of earlier reform initiatives has been relatively weak and, even if implemented, the effect of the reforms would be limited and take time to accumulate,” Fitch’s statement read. Unemployment in South Africa continues to be one of the country’s biggest challenges as it sits at 30.8%, according to Statistics South Africa (Stats SA).



“While South Africa is not alone in having been severely affected by the crisis, its capacity to mitigate the shock over the medium term is lower than that of many sovereigns given significant fiscal, economic and social constraints and rising borrowing costs,” Moody’s stated in their release. South Africa’s Minister of Finance, Tito Mboweni, stated that the downgrade “is a painful one” and the implications of this will now affect the country’s borrowing costs. The National Treasury added that as outlined by the president’s recovery plan, the government’s plan to prioritize economic recovery and fiscal consolidation remains the same. “The downgrade will not only have immediate implications for our borrowing costs, but it will also 6 constrain our fiscal framework,” Mboweni said in a statement. “There is, therefore, an urgent need for government and its social partners to work together to ensure that we keep the sanctity of the fiscal framework and implement much-needed structural economic reforms to avoid further harm to our sovereign rating.” Professor Burger believes that from an expert’s perspective, the government would need to take the following steps to alleviate the problem: “Re-establish fiscal sustainability and take steps to arrest the upward trend in the public debt-to-GDP ratio and ensure it does not breach 100%. This will require enforcing the medium-term budget policy statement (MTBPS) plans on the salary freeze on civil service salaries for this year and the next three years; Take necessary steps such a reducing red tape and policy uncertainty; Take steps needed to release spectrum and restructure and liberalize the energy sector. The latter includes getting the green energy sectors going. Many of these plans are in the pipeline but need acceleration.”



Treasury stated however that the rating agencies have indicated that the country’s rating strengths include “a credible central bank, a flexible exchange rate, an actively traded currency, and deep capital markets, which should help counterbalance low economic growth and fiscal pressures.”

Economy Concept

What South Africa’s Recent Credit Rating Downgrade Actually Means

Stay-at-home stocks, a pandemic-market favorite, are getting battered Monday after pharmaceutical giant Pfizer announced promising vaccine results that could reopen and restore a troubled economy, but might negatively affect companies like Zoom and Peloton that have benefited from the stay-at-home environment—at least temporarily. 



<h4 class="wp-block-heading">KEY FACTS</h4>



Tech-heavy Nasdaq, which hosts stay-at-home staples like Zoom, Netflix and Amazon, is lagging the broader market on Monday, is up just 1% while the Dow Jones and S&amp;P 500 are up about 4% and 3%, respectively, as industries left reeling by the pandemic celebrate news regarding the possibility of a return to normalcy.



Among the day&#8217;s biggest stock losers is pandemic phenomenon Zoom, which late last month&nbsp;<a href="https://www.forbes.com/sites/sergeiklebnikov/2020/10/29/zoom-is-now-worth-more-than-exxonmobil-and-founder-eric-yuans-net-worth-has-nearly-doubled-in-three-months/">surpassed ExxonMobil in market cap</a>; shares are down 15% on Monday but are still up more than 500% this year.Peloton Interactive–which is gearing up for what could easily be its best holiday season yet–is also tanking about 15%, pushing its year-to-date gains down to about 260%.



Netflix, meanwhile, is down about 5%–a slightly smaller decline for a firm that&#8217;s still up nearly 50% this year.



Though not as hard hit as others on Monday, cloud stocks like Twilio, Slack and Datadog are also falling–about 3%, 1.5% and 1%, respectively–despite the broader market gains.



Stocks like Zoom and Netflix should be &#8220;long-term winners, [but they&#8217;ll] lose in the short term, as their valuations ran ahead of actual earnings,&#8221; says James McDonald, the CEO of Los Angeles-based Hercules Investments, adding that such firms have &#8220;likely already seen peak levels of adoption and revenue&#8221; in the short term.



<h4 class="wp-block-heading">CRUCIAL QUOTE&nbsp;</h4>



&#8220;The enormous moves witnessed in some areas of the market are certainly due to a fundamental reassessment after the vaccine news, but [they] also reflect a huge positioning adjustment as investors try and dial back tech exposures and&#8230; buy names closer to the epicenter of the pandemic,&#8221; says Vital Media Knowledge Founder Adam Crisafulli. &#8220;Even though tech has been in the midst of a consolidation phase since the start of September, the group is still very owned and should this pro-cyclical rotation continue (which seems likely), momentum will face steep headwinds in the near-term.&#8221;



<h4 class="wp-block-heading">CHIEF CRITIC</h4>



Experts aren&#8217;t totally convinced Monday&#8217;s stock gains–and losses–will be long-lived. &#8220;I suspect the markets, which are already in a bullish mood due to the incoming Biden administration, are overthinking the positive vaccine news,&#8221; says Nigel Green, the CEO of $10 billion advisory deVere Group. “There’s a long road ahead still,&#8221; he adds, noting that investors will have more clarity on the implications of Monday&#8217;s announcement by the third week of November, when Pfizer&nbsp;<a href="https://www.pfizer.com/news/press-release/press-release-detail/pfizer-and-biontech-announce-vaccine-candidate-against" target="_blank" rel="noreferrer noopener">says it plans</a>&nbsp;to submit its vaccine candidate to the FDA for approval.



<h4 class="wp-block-heading">KEY BACKGROUND</h4>



Technology stocks have massively outperformed the broader market this year, with the Nasdaq composite up nearly 30% since January while the S&amp;P 500 and Dow Jones are up about 11% and 2%, respectively. Monday marked a reversal of fortune between firms doing well during the pandemic and those that have been hardest hit. While stay-at-home stocks sink, shares of banks, energy firms, cruiseliners and movie-theater operators are surging.&nbsp;



<h4 class="wp-block-heading">TANGENT</h4>



Shares of Clorox, a pandemic breakout stock, are also slumping–down 7%–on Wednesday, though they&#8217;re still up 34% for the year.&nbsp;



<h4 class="wp-block-heading">FURTHER READING</h4>



<a href="https://www.forbes.com/sites/jonathanponciano/2020/11/09/stocks-surge-worldwide-to-new-all-time-highs-after-pfizer-says-covid-19-vaccine-candidate-90-effective/">Stocks Surge Worldwide To New All-Time Highs After Pfizer Says Covid-19 Vaccine Candidate 90% Effective</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/roberthart/2020/11/09/pfizer-says-covid-19-vaccine-is-90-effective-although-trials-are-ongoing/">Pfizer Says Covid-19 Vaccine Is 90% Effective, Although Trials Are Ongoing</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/jonathanponciano/2020/11/06/billionaire-leon-cooperman-knows-for-sure-election-results-will-be-challengedheres-his-outlook-on-stocks-and-the-economy/">Billionaire Leon Cooperman Knows ‘For Sure’ Election Results Will Be Challenged—Here’s His Outlook On Stocks And The Economy</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/jonathanponciano/2020/11/06/stocks-end-week-with-biggest-post-election-day-rally-in-over-a-century/">Stocks End Week With Biggest Post-Election Day Rally In Over A Century</a> (Forbes)



-By Jonathan Ponciano, Forbes Staff

Key Speakers At The BoxWorks 2019 Conference

Zoom, Peloton, Netflix: Stay-At-Home Stocks Are Getting Smoked By Pfizer’s Latest Vaccine Prospects

Since March, global hospitality groups like Marriott, Wyndham and Hilton have fought an uphill battle to stay above water in the pandemic economy. Chains have seen their occupancy rates and revenues collapse with the onset of the virus, prompting hotel closures and mass layoffs. As of September, the American Hotel and Lodging Association, an industry trade group,&nbsp;<a href="https://www.ahla.com/sites/default/files/State%20Hotel%20Closures%20chart.pdf" target="_blank" rel="noreferrer noopener">estimated</a>&nbsp;that American hotels had lost over 870,000 jobs, over a third of the total workforce, and&nbsp;<a href="https://www.statista.com/statistics/206546/us-hotels-occupancy-rate-by-month/" target="_blank" rel="noreferrer noopener">Statista estimates</a>&nbsp;that occupancy has declined nearly 32% this year.



Industry disruption is certain, but for the big players, weathering the storm is likely a temporary problem. In the long run, business travel will resume, families will vacation again and public events will reopen to fanfare. People will find reasons to return to hotels. And by relying on their massive franchisee networks and light capital expenses, hotel groups can likely break even despite a low occupancy rate.



The greater challenge is in the short term: How do you convince customers in the middle of a global pandemic that it’s safe to stay in a hotel?



“Over 70% of our guests were paying more attention to the cleanliness of their own spaces,” says Phil Cordell, Hilton’s global head of new brand development, who helped lead their sanitation efforts. “It’s part emotional, part logical. How are we going to tackle that?”



For hotels, sanitation during coronavirus has proven an organizational and PR hurdle, mandating new supply chains, a full overhaul of cleaning practices, strategic partnerships and a tightly controlled public narrative. And while some of the changes are likely to be temporary—breakfast buffets, though taboo now, will surely return—others will be long-lasting.&nbsp;



For Wyndham Hotel Group, which owns hotel brands including Wyndham, Days Inn and Ramada Inn, decision-making power in the early stages of the pandemic were devolved to a small operations team that scrambled to make sure its franchisees had cleaning basic worked with its suppliers to drop-ship cleaning supplies directly to them.&nbsp;



“Trust eroded right away and had to be rebuilt,” says Mike Mueller, Wyndham’s head of brand operations. “Before, it was taken for granted that things were clean. All of the sudden that became the number one amenity.” Bottles of hand sanitizer and sanitary wipes, proudly displayed, became visual shorthand for a safe, tightly run ship.



Hilton ran a similar program for its franchisees, shipping sanitation care packages, courtesy of Lysol, to all of its locations globally. (If prominently displaying a bottle of Purell in your lobby is a hint, Hilton’s pandemic-era partnership with the iconic disinfectant spray is something slightly less subtle.) “The Americas were easy, Western Europe was fairly easy, but the further east you went in Europe, the harder it became,” says Cordell. “Russia, the -stan countries—those were the difficult ones.”



Public-facing brand partnerships were also at the forefront of Hilton’s larger pandemic response. In April, the company announced its partnership with the Mayo Clinic to develop its new sanitation program. The InterContinental Hotel Group, whose properties include Regent Hotels and Holiday Inn, also partnered with the Cleveland Clinic to develop its new “Way of Clean” regimen, while Marriott brought experts from Purdue University and Cornell on to its Covid-19 sanitation advisory board.&nbsp;



Despite the variety of voices, their recommendations have been similar: Make cleaning supplies and masks readily available, find food and beverage alternatives to traditional hotel dining and clean vigorously between customers’ stays, but scale back on housekeeping during visits to allay anxieties over having strangers in their rooms. (Housekeepers, one of the groups whose employment has suffered most during the coronavirus pandemic,&nbsp;<a href="https://www.nytimes.com/2020/09/11/travel/coronavirus-hotel-housekeeping.html" target="_blank" rel="noreferrer noopener">have noted</a>&nbsp;that the new processes have made their work more difficult.)



More creative problem-solving is likely to have mixed results. In April, Marriott announced that it would supply its locations with electrostatic sprayers, tools that spray a positively-charged disinfectant mist that adheres to surfaces. A&nbsp;<a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7275188/" target="_blank" rel="noreferrer noopener">study</a>&nbsp;from the Cleveland VA Medical Center found that while the sprays are effective, costs may be prohibitive: In September, when Marriott announced a&nbsp;<a href="https://www.usitt.org/news/marriott-providing-exclusive-offer-electrostatic-sprayers-sanitizing-covid-19" target="_blank" rel="noreferrer noopener">last call</a>&nbsp;for subsidized devices, a small handheld sprayer went for $1,227, while a larger backpack-size version cost $2,543. Meanwhile at Hilton, plans are underway to test UV light-emitting robots to assist in cleaning. Simpler fixes, like mobile check-in apps that limit face-to-face exposure at the front desk, have been widely implemented and are more likely to last the test of time.



“I think expectations are going to change and evolve,” says Cordell. “We’ve got to be quicker on our feet than ever before.”



&#8211;By Christian Kreznar, Forbes Staff

BRAZIL-HEALTH-VIRUS

With Occupancy Down 32% Due To Covid-19, Here’s How Hotel Chains Are Trying To Convince Customers It’s Safe To Stay

China’s GDP grew 4.9% in the third quarter compared to the same time last year, the country’s National Bureau of Statistics <a rel="noreferrer noopener" href="http://www.stats.gov.cn/english/PressRelease/202010/t20201019_1794616.html" target="_blank">said</a> Monday, as the economic superpower continues to rebound after the coronavirus pandemic. 



<h4 class="wp-block-heading">KEY FACTS</h4>



That growth was fueled by strong retail sales and industrial production, the government said.&nbsp;



China’s exports rose 9.9% last month while imports soared 13.2%—two more&nbsp;<a href="https://www.reuters.com/article/us-china-economy-trade/chinas-imports-exports-surge-as-global-economy-reopens-idUSKBN26Y0BL" target="_blank" rel="noreferrer noopener">strong signs</a>&nbsp;of recovery.&nbsp;



China’s is the only major economy that is expected to grow in 2020, according to the International Monetary Fund, which is forecasting&nbsp;<a href="https://www.imf.org/en/Countries/CHN" target="_blank" rel="noreferrer noopener">1.9% growth</a>&nbsp;for the year.&nbsp;



<h4 class="wp-block-heading">CRUCIAL QUOTE&nbsp;</h4>



Despite robust growth at home, the Chinese government also noted Monday that the global environment remains “complicated and severe” and that the country is under “great pressure” to prevent any further outbreaks of the virus.&nbsp;



<h4 class="wp-block-heading">KEY BACKGROUND</h4>



China’s economy&nbsp;<a href="https://www.forbes.com/sites/isabeltogoh/2020/04/17/coronavirus-drags-chinas-economy-into-first-slump-in-four-decades/#1aa08e324bcb">shrank 6.8%</a>&nbsp;in the first quarter—its worst contraction in 40 years—as the government shut down nearly all activity in parts of the country to prevent the spread of the coronavirus. In the second quarter, growth bounced back to 3.2% after factories reopened and the government poured billions of dollars in stimulus measures back into the economy.&nbsp;



<h4 class="wp-block-heading">TANGENT</h4>



Economists&nbsp;<a href="https://markets.businessinsider.com/news/stocks/economic-outlook-gdp-estimates-bank-america-stimulus-bill-recovery-quarter-2020-9-1029582684#" target="_blank" rel="noreferrer noopener">expect</a>&nbsp;the United States to see growth in the third quarter, too, but that growth is likely to be limited in the fourth quarter if further stimulus measures from the federal government are delayed until 2021.&nbsp;



<h4 class="wp-block-heading">FURTHER READING</h4>



<a href="https://www.forbes.com/sites/sarahhansen/2020/07/30/economy-shrank-at-historic-33-annual-rate-in-second-quarter-but-thats-not-the-whole-story/">Economy Shrank At Historic 33% Annual Rate In Second Quarter—But That’s Not The Whole Story</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sarahhansen/2020/09/07/chinas-exports-surged-95-in-august-despite-escalating-tensions-with-the-united-states/">China’s Exports Surged 9.5% In August Despite Escalating Tensions With The United States</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/carlieporterfield/2020/10/15/europe-breaks-record-for-weekly-coronavirus-cases-as-countries-enforce-new-lockdowns/">Europe Breaks Record For Weekly Coronavirus Cases As Countries Enforce New Lockdowns</a> (Forbes)



-By Sarah Hansen, Forbes Staff

CHINA-ECONOMY-GLASS

China’s Economy Continues Rebound With 4.9% Growth In Third Quarter

Ruth Porat, the stalwart chief financial officer of Alphabet and Google, is no stranger to a crisis. She began her career at Morgan Stanley in 1987, a mere seven weeks before Black Monday—the largest single-day decline in trading history at the time. “At that moment, I was concerned that maybe my career was over before it even started,” she recalls.



Far from it. Porat is one of the rare corporate executives to have transcended the upper echelons of Wall Street to the highest ranks of Silicon Valley. While the scenery may be different, many of the challenges remain the same: navigating economic downturns, government investigations and regulatory hurdles. Of course, a global pandemic is a new obstacle. “This environment is more challenging than anything I&#8217;ve seen because you&#8217;re combining a health crisis with an economic crisis,” says Porat in her first-ever interview with&nbsp;Forbes&nbsp;from her home in Palo Alto, California. “The path forward is less certain.”&nbsp;



But Porat has deftly charted a path through uncertain territory before. During her 28-year tenure at Morgan Stanley, she held roles such as vice chairman of investment banking and global head of financial institutions before ultimately rising to the rank of chief financial officer in January 2010. “I certainly started in banking when it was not easy to be a woman in banking,” she says. “I haven’t thought about those shoulder pads for a long time, the bow ties, the scarves, the scotch, the horrible efforts to fit in.” What kept her there, she says, was the opportunity to “keep learning and growing”—remarkably, in the face of great turmoil. Case in point: being called upon by the U.S. government to help with the bailouts of insurance giant AIG and mortgage-financing agencies Fannie Mae and Freddie Mac during the Great Recession. “Much like the current crisis environment, one of the highlights of my career was advising the U.S. Treasury Department during the 2008 financial crisis,” she says. “I was able to use the skills I developed over a [lifelong] career for something that was so important at that moment in time for the country.”&nbsp;



Over a decade later, Porat has the same steely resolve when it comes to the coronavirus pandemic, which has already taken a tremendous toll on the U.S. economy. Over 100,000 businesses permanently shuttered as of April, according to a&nbsp;<a href="https://www.nber.org/papers/w26989.pdf" target="_blank" rel="noreferrer noopener">study</a>&nbsp;published by the National Bureau of Economic Research. At the same time, 88% of small business owners say they’ve used all of their Paycheck Protection Program loan funding, according to a recent&nbsp;<a href="https://www.axios.com/small-business-confidence-goldman-sachs-74ba6e69-ad0e-4cb5-bee3-d03445b2a30e.html" target="_blank" rel="noreferrer noopener">survey</a>&nbsp;of over 1,500 businesses conducted by Goldman Sachs. And without additional government funds, 30% say they’ll exhaust their cash reserves by the end of the year. That’s why Porat is leading Google’s latest efforts to help get America’s ravaged small businesses and economy back on track. This while managing one of the world’s largest corporate balance sheets amid the looming threat of anti-trust lawsuits that may hold the fate of the entire tech industry in the balance. It may just prove to be her greatest challenge yet.



While Google is a corporate behemoth, its roots are in small business. “It’s so clear that small businesses are the lifeblood of the American economy,” says Porat, rattling off the stats: They provide about two thirds of net new jobs, and 67 cents of every dollar spent at a small business stays in the local economy.



At the start of the pandemic, Google CEO Sundar Pichai announced an <a rel="noreferrer noopener" href="https://blog.google/inside-google/company-announcements/commitment-support-small-businesses-and-crisis-response-covid-19/" target="_blank">$800 million commitment</a> to aid small businesses and provide overall crisis relief. Of that, a $200 million Grow with Google Small Business fund was launched in March in partnership with the Opportunity Finance Network—a national association of community development financial institutions—with a mission to serve small businesses underserved by mainstream finance and a proven model for moving capital into the hardest to serve communities. The main objective? Supporting the short-term recovery and long-term financing needs of small businesses hardest hit by Covid-19. To be clear, this is not a handout. The majority of funds are earmarked as up to 10-year term loans at no greater than 3% interest. Some $340 million in Google Ads credits were also made available to all small businesses with active accounts over the past year.



<blockquote class="wp-block-quote has-text-align-center is-style-large is-layout-flow wp-block-quote-is-layout-flow">“Small businesses are part of our DNA as a company&#8230;Over 21 years ago, Google itself was a small business that started in a two-car garage and our first ads customer was a mail-order lobster business in Maine.” <cite>Ruth Porat, CFO of Alphabet &amp; Google</cite></blockquote>



“Small businesses are part of our DNA as a company,” says Porat, sharing the company’s approach to small business for the first time since the pandemic began. “We often talk internally about the fact that over 21 years ago, Google itself was a small business that started in a two-car garage and our first ads customer was a mail-order lobster business in Maine.”&nbsp;



In many ways, Porat sees her transition to Silicon Valley as getting back to her roots. She was raised in Palo Alto, California, where her father, a former research fellow at Harvard, moved the family to take&nbsp; a position at the Stanford Linear Accelerator Center. After earning her bachelor’s degree in economics and international relations at Stanford in 1979, she went on to get her master’s degree in industrial relations from the London School of Economics and an MBA from Wharton before joining Morgan Stanley. Porat was co-head of technology investment banking during the ‘90s tech boom, working alongside famed internet analyst Mary Meeker, who is godmother to her three children. “Tech was something I had done quite a bit, actually,” says Porat. That’s an understatement: She was the chief architect behind the debt financing that saved Amazon from near collapse during the dot-com crash in 2000 and then worked on Google’s IPO in 2004. “It was great to see the vision, the mission, the drive of Google at such an early stage,” she says. “Given I’ve known Google since inception, and how passionate I was about the company, when the opportunity presented itself, I said yes on the spot.”



While Porat has broken the glass ceiling time and again, Google has struggled with diversity within its own ranks. As racial tensions reached a boiling point this summer, Google <a rel="noreferrer noopener" href="https://ofn.org/articles/ofn-announces-first-round-google-loans-and-googleorg-funded-grants" target="_blank">announced</a> in June an additional $45 million in loans and $5 million in Google.org grants to assist small businesses, with a focus on Black-owned businesses. The company committed to increase the diversity of its leadership 30% by 2025. “Hopefully this is the moment that changes race relations and really addresses racial inequality. There is no more time—and so we’re taking a hard look at ways we can help address systemic racism against the Black community with a real sense of urgency,” she says.



The company also announced the first round of the Grow with Google Small Business Fund. Five community development financial institutions (CDFIs)&nbsp; were awarded a total of $15.5 million in loans, and six received $750,000 in grants. Among those awarded were Grameen America, a non-profit founded by Nobel Peace Prize winner Mohammed Yunnus (and currently run by Andrea Jung, former chairman and CEO of Avon) that provides microloans, training and support to diverse low-income women entrepreneurs and Citizens Potawatomi Community Development Corporation, one of the largest Native-owned CDFIs in the nation. “Systemic inequities, like the racial wealth gap create significant disadvantages for minority communities, which is why we’re so focused on providing Black, Latinx and other underserved communities with more equitable access to capital through our partnership,” says Porat.&nbsp;



The partnership is also unique in structure compared to relief efforts of other tech firms like Facebook and Amazon. “What makes Google such a strategic first mover and different is their focus on recovery versus just short-term relief,” says Lisa Mensah, president and CEO of OFN. “It is extremely rare for a corporate Treasury to release $170 million and judge on their own that this is the kind of debt they will hold. They didn’t wait for a risk rating from S&amp;P or to have it all guaranteed by the government or another source—Google is a trailblazer.”



For Porat, it was a chance to help reposition businesses that were already at a significant disadvantage prior to the pandemic. “Most small businesses are started with personal assets and loans that are typically guaranteed with one’s network,” says Porat. “But if you start with the types of wealth disparities that we have in society where only 20% of small businesses are minority-owned and only 21% are women-owned, our current situation is an outgrowth of that initial disparity.”&nbsp;



The small business lending space is a massive market, one with around <a rel="noreferrer noopener" href="https://qedinvestors.com/wp-content/uploads/2015/10/The-Brave-100-The-Battle-for-Supremacy-in-Small-Business-Lending_vf.pdf" target="_blank">$800 billion in annual originations</a> and an antiquated process involving tedious paperwork, manual inputs and very little transparency—or software, for that matter. Will Google, a company whose founders famously spoke in 2014 of the need for “<a rel="noreferrer noopener" href="https://www.inc.com/laura-montini/larry-page-says-its-time-to-think-big.html" target="_blank">revolutionary change</a>,” set its sights on disrupting the small business lending space next? Porat quickly puts that idea to rest. “We’re not a financial institution and we don’t intend to become [one],” she asserts.



<blockquote class="wp-block-quote has-text-align-center is-style-large is-layout-flow wp-block-quote-is-layout-flow">“The biggest compliment I can give someone is to say they are a real difference-maker—that’s Ruth.”<cite>Hank Paulson, former U.S. Treasury Secretary &amp; former Goldman Sachs CEO</cite></blockquote>



Throughout her decades-long career, Porat has seen great success bridging divides to find solutions. “The biggest compliment I can give someone is to say they are a real difference maker—that’s Ruth,” says Hank Paulson, former U.S. Treasury Secretary during the financial crisis and a former CEO of Goldman Sachs. In 2013, Porat landed on President Barack Obama’s shortlist for deputy treasury secretary until she withdrew her name,&nbsp;<a href="https://dealbook.nytimes.com/2013/03/28/ruth-porat-withdraws-name-from-deputy-treasury-race/" target="_blank" rel="noreferrer noopener">reportedly</a>&nbsp;over concerns of how bankers were being treated by politicians. “She&#8217;s a real U.S. patriot with a passion for public service.”&nbsp;



To be fair, Google’s efforts are not just altruism. They are growth engines for big business—and of course, some good publicity doesn’t hurt. The over 30 million small businesses across the U.S. drive nearly half of all of gross domestic product. Globally, small and medium-sized enterprises represent over 90% of the business population and 55% of gross domestic in developed economies, according to the&nbsp;<a href="https://www.ifac.org/knowledge-gateway/contributing-global-economy/discussion/foundation-economies-worldwide-small-business-0" target="_blank" rel="noreferrer noopener">World Trade Organization</a>. And like many of their industry peers like Facebook, Google relies on small businesses for a sizable portion of their business, although they, along with their competitors, do not disclose the actual amount.



“I look back on some of the toughest times in my career, and I know that I’ve learned from them,” says Porat, a two-time breast cancer survivor.  “That ghastly, terrifying experience was also a gift because that proverbial question became all too real: What happens if you are given no more than five years to live?” she shared in her <a rel="noreferrer noopener" href="https://www.youtube.com/watch?v=dGdugTS_RR8" target="_blank">2016 Wharton commencement speech</a>. “So I set about figuring it out: What did I want to do with what could be a limited amount of time? And I realized I simply had no regrets. I hadn’t punted on my life—I hadn’t put things on hold. My lesson from that awful experience was that if you want to do something, then do it . . . life doesn’t know it’s supposed to follow a schedule.”



<blockquote class="wp-block-quote has-text-align-center is-style-large is-layout-flow wp-block-quote-is-layout-flow">“In the midst of tremendous disruption and market turmoil, Ruth’s judgment and experience are invaluable.”<cite>Stephen Schwarzman, cofounder &amp; CEO of Blackstone</cite></blockquote>



That can-do anything attitude and fortitude may just be a key part of her recipe for not just surviving crises—but emerging stronger as a result of them. “In the midst of tremendous disruption and market turmoil, Ruth’s judgement and experience are invaluable,” says Stephen Schwarzman, cofounder and CEO of Blackstone. “It is rare to find people who have operated at the highest levels on Wall Street and Silicon Valley and that combination is exceptionally powerful.” In June, she joined the board of the $564 billion private-equity powerhouse, whose IPO she also worked on in 2007.



Porat is quick to acknowledge that the tough times she’s endured pale in comparison to much of the pain being felt in the world today. Yet, history has taught her to still believe in the promise of better days ahead.&nbsp;



 “For those who are looking at this moment and wondering the path forward, I would say that having lived through many turbulent times before, there are recoveries,” she says. “New opportunities arise out of crises.”



by Maneet Ahuja, Forbes Staff

Fortune Most Powerful Women Summit 2018 – Day 1

Exclusive: Ruth Porat On Leading Through Crisis And Google’s Latest Moonshot To Rebuild The U.S. Economy—One Small Business At A Time

American credit rating agency, Fitch, announced on September 24 that it has downgraded Zambia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from &#8216;CC&#8217; to ‘C’. The country’s senior unsecured foreign currency bonds were also downgraded this week.



This follows the Zambian government issuing a &#8220;consent solicitation&#8221; to holders of three global bonds (Eurobonds) on September 22, requesting a suspension of debt service payments for six months. This would effectively be covering the upcoming three coupon payments due on October 14, and January and March 2021.



Zambia’s Ministry of Finance stated that the country has been confronted with challenging macroeconomic and fiscal situations aggravated by the Covid-19 crisis. This has severely impacted the country’s public finances.



“A combination of declining revenues and increased unbudgeted costs caused by the Covid-19 pandemic has resulted in a material impact on the Government’s available resources to make timely payments on its indebtedness leading to increasing debt-servicing difficulties,” Fredson Yamba, Secretary to Treasury, said in a statement on Tuesday.



In its report, Fitch stated that should bondholders agree to the suspension in payment, this would constitute a distressed debt exchange (DDE).



“The authorities have indicated that they will continue to make debt service payments on outstanding Eurobonds if an agreement is not reached. However, Fitch judges that there is a high risk of a missed debt payment over the forecast horizon,” Fitch said in its press release.



The Zambian government further said in a statement that they are still engaging with the International Monetary Fund (IMF) to secure financial assistance. The government hopes to create a program of reforms that would help in stabilizing the macroeconomic outlook of the country and restore its fiscal balance.



“In this context, the government is committed to finding a consensual and collaborative resolution to the debt sustainability issues it is currently facing,” Yamba said.



The ‘CC’ rating, which occurred on April 16, due to the sovereign’s constrained external liquidity exacerbated by the pandemic, meant that the country was left in a highly vulnerable position, financially. How will this newly downgraded rating bode for Zambia now?



“The downgrade of Zambia&#8217;s rating reflects Fitch&#8217;s view that a default event is imminent.”

Graph Falling Down in Front Of Zambia Flag. Crisis Concept

Zambia’s Credit Rating Downgraded to Near Junk Status

As the coronavirus crisis wears on, new research from the Pew Research Center shows that public perception of the economy has “<a rel="noreferrer noopener" href="https://www.pewresearch.org/fact-tank/2020/09/03/views-of-the-economy-have-turned-sharply-negative-in-many-countries-amid-covid-19/" target="_blank">turned bleak</a>” in large parts of the world.



KEY FACTS



A median of 68% of people considered their country’s current economic situation to be bad, the researchers found, while 31% said conditions were good.&nbsp;



Italy had the largest portion of people who rated the economic situation negatively, with 90% describing the situation as “bad.”&nbsp;



In eight of the 14 countries surveyed, including the U.K., France, and South Korea, the majority of people expected their countries’ economies to get worse.



In the United States, Germany, and Canada, however, people were more likely to say that the economy would improve over the next year than to say it would get worse.&nbsp;



The researchers noted that in nearly every country they surveyed, the perception of how bad the economy is tied to how the country handled the coronavirus crisis: people who viewed their country’s response negatively were more likely to have a negative view of the economic situation.&nbsp;



CRUCIAL QUOTE



“In addition to the broadly negative assessments of current economic conditions, few in the countries surveyed are hopeful things will get better in the next year,” researchers Shannon Schumacher and Mara Mordecai wrote.&nbsp;



KEY BACKGROUND



Countries all around the world are now faced with the dire economic consequences of the pandemic. Australia has entered its&nbsp;<a href="https://www.nytimes.com/2020/09/02/business/australia-recession.html" target="_blank" rel="noreferrer noopener">first recession</a>&nbsp;in almost 30 years. The United Kingdom has entered&nbsp;<a href="https://www.bbc.com/news/business-53748278" target="_blank" rel="noreferrer noopener">its first recession</a>&nbsp;in more than a decade; CNN reports that the U.K.’s economy shrunk by&nbsp;<a href="https://www.cnn.com/2020/08/28/economy/global-recession-g7-countries/index.html" target="_blank" rel="noreferrer noopener">more than 20%</a>&nbsp;between April and June. France just unveiled a<a href="https://www.reuters.com/article/us-france-economy/france-unleashes-100-billion-euro-stimulus-to-revive-economy-idUSKBN25U0IA" target="_blank" rel="noreferrer noopener">&nbsp;$118 billion stimulus&nbsp; plan</a>&nbsp;to combat its own economic woes. Japan’s economy saw its biggest downturn on record, the BBC&nbsp;<a href="https://www.bbc.com/news/business-53802967#:~:text=Coronavirus%3A%20Japan%20suffers%20its%20biggest%20economic%20slump%20on%20record,-17%20August%202020&amp;text=The%20Japanese%20economy%20has%20shrunk,27.8%25%20on%20an%20annualised%20basis." target="_blank" rel="noreferrer noopener">reported</a>, after its GDP fell nearly 8% between April and June. In the United States, trillions in stimulus spending is on track to push debt to GDP levels above 100% next year.&nbsp;



FURTHER READING



<a href="https://www.pewresearch.org/fact-tank/2020/09/03/views-of-the-economy-have-turned-sharply-negative-in-many-countries-amid-covid-19/" target="_blank" rel="noreferrer noopener">Views of the economy have turned sharply negative in many countries amid COVID-19</a>&nbsp;(Pew Research Center)



<a href="https://www.forbes.com/sites/sarahhansen/2020/09/02/thanks-to-stimulus-spending-us-debt-expected-to-exceed-the-size-of-the-entire-economy-next-year/#7ad2290d2384">Thanks To Stimulus Spending, U.S. Debt Expected To Exceed The Size Of The Entire Economy Next Year</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sarahhansen/2020/07/30/economy-shrank-at-historic-33-annual-rate-in-second-quarter-but-thats-not-the-whole-story/">Economy Shrank At Historic 33% Annual Rate In Second Quarter—But That’s Not The Whole Story</a>&nbsp;(Forbes)



-Sarah Hansen, Forbes Staff

Business office is closed, bankrupt business, global economic crisis impact by Coronavirus COVID-19 pandemic concepts. Unidentified person wearing mask put closed sign on front door with 3d viruses recession graph

Coronavirus Crisis Has Led To ‘Bleak’ Perception Of The Economy, Study Says

The newly-established delivery app industry in Tanzania is serving up old business in a new format, diversifying the e-commerce market and driving consumer behavior beyond Covid-19.



When Zadok Prescott first started the home delivery application, Piki Tanzania, he only thought of it as a supplement to restaurant dining. However, when Tanzania also fell victim to the Covid-19 crisis in March, Piki, which was still new and the only established app of its kind in the country, soon became the only way some restaurants were doling out their services.



“I think a lot of people took that decision to stay at home and avoid contact. So, we suddenly realized how important we were becoming,” says Prescott, also former CEO of Jumia Tanzania.



At the end of November 2019, Jumia, Africa’s leading online retailer known as the ‘Amazon of Africa’, had shut its e-commerce operations in Tanzania in a review of its portfolio.



However, ironically, since the beginning of 2020, in the very market that Jumia exited, multiple e-commerce platforms suddenly sprung up, from food and grocery delivery apps to ‘online malls’ that sell commercial goods, besieging a market still relatively new to online shopping and dining.



With Covid-19, the role these platforms played in the lives of local businesses changed almost overnight.



<figure class="wp-block-gallery columns-1 is-cropped wp-block-gallery-1 is-layout-flex wp-block-gallery-is-layout-flex"><ul class="blocks-gallery-grid"><li class="blocks-gallery-item"><figure><img loading="lazy" decoding="async" width="1024" height="763" src="https://www.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM-1024x763.jpeg" alt="" data-id="47147" data-full-url="https://www.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM.jpeg" data-link="https://www.forbesafrica.com/?attachment_id=47147" class="wp-image-47147" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM-1024x763.jpeg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM-300x224.jpeg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM-600x447.jpeg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM-768x572.jpeg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM.jpeg 1080w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure></li></ul></figure>



For Levant, a fine dining restaurant offering Middle Eastern cuisine in upscale Dar es Salaam, delivery was not the path they wanted to take, but had to.



“When Covid-19 hit, our sales were 90% lower. Our plan was to give an experience, it’s not only the food you eat… [but] we realized people were afraid, so we had to focus on delivery… take-away was most of our sales,” says Hussein T Hamadi, the owner of Levant, which started delivering through Piki when the pandemic hit and even started its own delivery service.



Although this is the path Levant opted, Hamadi does not see delivery and e-commerce playing a significant role in his business with restaurants now reopening in full swing in the country.



Piki surely has an advantage in the country with its reliable infrastructure and experience, but the commissions are not reasonable in Hamadi’s opinion, since his own delivery service costs him much less.



He would rather people came into his restaurant because this is part of the service he wants to offer.



In addition to that, Hamadi is opening yet another restaurant, with a more delivery-friendly menu and where he hopes e-commerce may be more feasible.



On the other hand, Central Park Café, an American-style café and children’s park and venue that also works with Piki, does not see any way in which businesses, going forward, can avoid e-commerce.



“During these times, people rely on [Piki]… it’s basically a lot of the weight lifted off us for the pressure because it is a very tough market and things are very unpredictable here,” says Sidiqua Versi, co-owner of the café.



The fact that the liability for deliveries is also no longer her problem is an advantage, she adds.



Versi agrees the delivery and commission fees are not reasonable for all, and individual delivery is far more financially sustainable, but an app like Piki is reliable and she would rather keep working with them to use their customer base and keep her service timely and efficient.



However, she has noticed customers opting for cheaper options and more players foraying into the market with unique business models.



<figure class="wp-block-gallery columns-1 is-cropped wp-block-gallery-2 is-layout-flex wp-block-gallery-is-layout-flex"><ul class="blocks-gallery-grid"><li class="blocks-gallery-item"><figure><img loading="lazy" decoding="async" width="1024" height="683" src="https://www.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM-1024x683.jpeg" alt="" data-id="47148" data-full-url="https://www.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM.jpeg" data-link="https://www.forbesafrica.com/?attachment_id=47148" class="wp-image-47148" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM-1024x683.jpeg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM-300x200.jpeg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM-600x400.jpeg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM-768x512.jpeg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM.jpeg 1080w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure></li></ul></figure>



New players, renewed approaches



Duka.direct is an online grocery delivery service that runs on a platform created by Selcom Tanzania, a digital payment system developer that also saw a very quick change in consumer behavior when Covid-19 gripped the country.



“The adoption was a lot faster than we had anticipated and we even had to accelerate deployment quite rapidly,” says Sameer Hirji, Executive Director of Selcom. It is planning to expand to a range of services to include restaurant food delivery, as well as connecting to businesses selling electronics, pharmaceuticals and other items, eventually throughout the region. However, its approach is not only controlling the supply of products, but in the long run, seeing itself as more than just being a customer experience and service provider.



“We’re thinking like a financial services business, but using consumer goods and services… We want to hopefully one day make e-commerce extremely mainstream and as a result, for the common man, who previously couldn’t afford maybe cheese, because it was marked up at like 30% at a supermarket, to be able to access those premium products and consume them more readily and rapidly,” he says.



He hopes to eventually pilot using Selcom’s widely-used payment agents to act as sales and pickup points, as well as introduce lending on the apps to allow customers to buy goods by borrowing from banks Selcom has relationships with.



“At least initially, [duka.direct] can be a standalone business [not making much profit]. But it needs to be part of something bigger that can feed it, and then continuously grow it…



“I think raising awareness and giving back value is where we see the market going,” he adds.



The biggest problem Hirji’s platform did face during the time was running out of space and local suppliers who were not able to keep up with the demand.



“That right image in the market matters in terms of what the delivery, the last mile, looks like… [and] to a great extent the optics it presents in the market in terms of brand and professionalism,” says Hirji.



However, there are players in the market like Inalipa, a platform that mimics an ‘online mall’ with a variety of local shops and brands, ranging from Instagram businesses to large retailers, that has internalized all operations.



“I’m sure our competitors, because of our model, have much higher volumes than us. But the experience that the customer gets with us is something that stands out… We’re able to control the entire customer experience. And I think for us, that’s the big differentiator,” says Nadeem Juma, chairman of AIM group, which developed and runs Inalipa.



Inalipa also takes a slightly different approach by aggregating retail suppliers and leveraging their brands. While Juma says it was initially not easy to bring them on, Covid-19 forced Inalipa to be able to tell them a story of how this would impact their business positively.



“Trading is actually what the bulk of Tanzanian business is built on… it’s really old business in a new format. And that’s the way we look at it… We aren’t trying to change the culture or the way a consumer purchases traditionally; we are enabling that same experience on a digital platform,” he adds.



&nbsp;But even with trying to maximize customer satisfaction, Juma found that the number one question among customers who went through the process of putting items in their cart was that they weren’t sure if they could trust the platform.



“Right now, we’re realizing that people are the early adopters, starting off with very small basket sizes and now those basket sizes are growing.”



Duka.direct provides store credit and uses marketing to build credibility and confidence and Inalipa uses customer service calls to encourage people to go through with purchases.



“What [Covid-19] showed us is there’s enough space in the market for different players as long as they’re very focused on what they’re trying to achieve and not trying to do a little bit of everything,” says Juma.



The direct contact and understanding of the local market is a large advantage to players in the market, according to Prescott, and is what differentiates them.



<figure class="wp-block-gallery columns-1 is-cropped wp-block-gallery-3 is-layout-flex wp-block-gallery-is-layout-flex"><ul class="blocks-gallery-grid"><li class="blocks-gallery-item"><figure><img loading="lazy" decoding="async" width="1024" height="683" src="https://www.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM-1024x683.jpeg" alt="" data-id="47152" data-full-url="https://www.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM.jpeg" data-link="https://www.forbesafrica.com/economy/2020/08/19/tanzanias-recent-app-boom-a-new-market-for-e-commerce/attachment/whatsapp-image-2020-07-06-at-2-50-37-pm/" class="wp-image-47152" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM-1024x683.jpeg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM-300x200.jpeg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM-600x400.jpeg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM-768x512.jpeg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM.jpeg 1080w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure></li></ul></figure>



Looking into the future



Both Hirji and Juma acknowledge that the global valuation-driven approach to e-commerce, which was Jumia’s too, is not necessarily the approach that can work in Tanzania.



“I don’t believe that that is the appropriate way to go about e-commerce because you really cannot raise money at that scale continuously to be sustainable. You have to make it a profitable business… You need to identify what are the levers, one of the things that you want to drive, and then map that out over a period of time” says Juma.



Being in the digital space does allow you to pivot faster, according to Hirji.



And this can be especially useful in navigating the regulatory landscape in Tanzania because of the penetration of mobile money, in Juma’s opinion.



“It’s a highly regulated space. So you need to be aware of what you can and can’t do. And sometimes that can be what could slow you down… But I think it also allows you to contribute to the actual country’s growth as well.”



However, Tanzania is still a difficult market, with about 60% market share in terms of smartphones in the country and utilization under 20%, and if the penetration is further discounted by the number of people who will actually swap their traditional practices for an e-commerce experience, then that drops even more, says Hirji.



Such data is available, but not in much detail about e-commerce, mostly because of how the market has diversified only recently in the country.



Juma believes there is a greater good if everyone is a bit more open and transparent in sharing their experience of this business, as Inalipa’s data collection has shown customer sets that he didn’t know existed.



While Prescott acknowledges Jumia did educate the Tanzanian market on the e-commerce experience, there is a long way to go in terms of how consumer behavior will change or adapt in the country to prove sustainable beyond e-commerce being a critical service in the time of Covid-19.



“It’s certainly beyond just your traditional corner store saying, ‘I want to go digital because everyone else is going online’. I think there’s a roadmap that’s a lot more sophisticated than just a Shopify storefront,” says Hirji.&nbsp;



– By Inaara Gangji

WhatsApp Image 2020-07-06 at 2.50.39 PM

Tanzania’s Recent App Boom: A New Market For E-Commerce

The coronavirus pandemic has thrown millions of Americans into financial distress, but new <a rel="noreferrer noopener" href="https://libertystreeteconomics.newyorkfed.org/2020/08/the-disproportionate-effects-of-covid-19-on-households-with-children.html" target="_blank">research</a> from the Federal Reserve Bank of New York shows that the economic impact has been especially pronounced for households with children. 



KEY FACTS



Households with children under 18 living at home are more likely to have lost jobs and income: household heads lost their jobs in 12.9% of households with children compared to 9.2% of households without them, the study found.&nbsp;



They’re also more likely to have missed rent or debt payments: 19.5% of households with children said they skipped a rent, mortgage, auto loan, credit card, or student loan payment compared to 12.5% of households without.



Families with kids are also more likely to rely on external support like unemployment benefits, food stamps and food banks, and financial support from family and friends.



This reliance is even higher among single-parent, non-white households and households in low-income neighborhoods, the researchers found.&nbsp;



All this, of course, is only compounded by the added burdens of virtual schooling and closed childcare facilities that working parents and caretakers must contend with.



BIG NUMBER



39%. That’s the portion of households with children that reported income losses, compared to 30.8% of households without.&nbsp;



CRUCIAL QUOTE 



“Our results reveal high reliance by [households with children], and especially those headed by a single parent, on food and financial support from social networks as well as government assistance in the form of SNAP and unemployment benefits since the onset of the COVID-19 pandemic,” the researchers wrote. “While a greater reliance on assistance undoubtedly predates the pandemic, the high rates of job and income loss experienced by households with children has clearly heightened the importance of such support.”



KEY BACKGROUND



Several key benefits of the CARES Act have expired—most notably supplemental unemployment benefits and eviction protections for certain renters—but the Trump administration and top Democratic lawmakers have been unable to come to an agreement on what the next round of federal stimulus legislation should look like. The $3 trillion Heroes Act, passed by the Democrat-led House in May, included additional support for federal unemployment and nutrition assistance, along with another round of direct stimulus payments and hazard pay for essential workers. The Republican-led Senate never took up the bill, though it did release its own plan—the Heals Act—last month. When Democratic lawmakers and White House policymakers were unable to reach a compromise last week, President Trump took&nbsp;<a href="https://www.forbes.com/sites/rachelsandler/2020/08/08/600-weekly-unemployment-check-cut-to-400-under-trump-executive-orders-and-more/">executive action over the weekend</a>&nbsp;with respect to enhanced unemployment benefits, student loans, eviction protections and a payroll tax deferment. Those actions alone, however, aren’t likely to be as effective in propping up the economy as would legislation from Congress.&nbsp;



<h2 class="wp-block-heading">FURTHER READING</h2>



<a href="https://www.forbes.com/sites/sarahhansen/2020/08/12/second-stimulus-negotiations-appear-to-be-at-a-standstill-heres-what-could-happen-next/">Second Stimulus Negotiations Appear To Be At A Standstill, Here&#8217;s What Could Happen Next</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sarahhansen/2020/06/05/heres-what-the-racial-wealth-gap-in-america-looks-like-today/">Here’s What The Racial Wealth Gap In America Looks Like Today</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sarahhansen/2020/08/11/heres-why-that-400-unemployment-check-from-trumps-executive-order-may-not-happen/">Here’s Why That $400 Unemployment Check From Trump’s Executive Order May Not Happen</a> (Forbes)



<a href="https://www.forbes.com/sites/sarahhansen/2020/08/13/unemployment-claims-clock-in-under-1-million-for-first-time-since-coronavirus-crisis-began/">Unemployment Claims Clock In Under 1 Million For First Time Since Coronavirus Crisis Began</a> (Forbes)



-Sarah Hansen, Forbes Staff

Re-opening Continues Across Densely Populated New York And New Jersey Areas

The Coronavirus Recession Has Been Worse For Families With Kids, N.Y. Fed Finds

The market finished lower on Tuesday as Big Tech stocks posted declines which offset an initial rally sparked by Russia&#8217;s claims that it approved the world’s first coronavirus vaccine.



KEY FACTS



The Dow Jones Industrial Average was down 0.4%, around 100 points, on Tuesday, while the S&amp;P 500 fell 0.8% and the tech-heavy Nasdaq Composite lost 1.7%.



Although stocks moved higher for most of the day—with the Dow at one point rising over 350 points, all three major indexes turned negative in the final hour of trading.



Investors continued to rotate out of Big Tech stocks, dragging the market lower: Shares of Amazon, Microsoft, Apple, and Netflix all fell between 1% and 2%.



Stocks initially rose following Russian President Vladimir Putin’s overnight announcement that his country was the first to&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2020/08/11/russia-has-approved-worlds-first-covid-19-vaccine-putin-says/#444798ff59a3">grant regulatory approval</a>&nbsp;for a coronavirus vaccine, after less than two months of human testing.



While Russia’s rapid approval of the vaccine has met with skepticism and&nbsp;<a href="https://www.reuters.com/article/us-health-coronavirus-russia-vaccine-put/russia-becomes-first-country-to-approve-a-covid-19-vaccine-says-putin-idUSKCN25712U?il=0" target="_blank" rel="noreferrer noopener">raised concern</a>&nbsp;among medical experts, the news did spark optimism among investors that a vaccine could be available in the U.S. sooner than expected.



Shares of companies that would benefit from a vaccine and a reopening of the economy—including airlines, cruise stocks and retailers—jumped on the news Tuesday.



CRUCIAL QUOTE



“Although the timing is uncertain, the stock market is expressing confidence that the pandemic will end eventually with a vaccine—or multiple vaccines—and with help from better treatments in the interim,” says Jeff Buchbinder, equity strategist for LPL Financial.



WHAT TO WATCH FOR



Ongoing coronavirus stimulus talks, which ended in a stalemate last week. President Trump on Saturday issued several executive orders to extend economic relief programs, such as expanding federal unemployment benefits—at a reduced rate of $400 per week, deferring student loan payments through 2020, extending a federal moratorium on evictions and providing a payroll tax holiday. But Trump’s executive action was met with criticism from both parties and is likely to face legal challenges, since continuing the programs would require federal funding from Congress. Treasury Secretary Steven Mnuchin&nbsp;<a href="https://www.forbes.com/sites/sarahhansen/2020/08/10/mnuchin-says-white-house-is-willing-to-put-more-money-on-the-table-for-next-stimulus-bill/">said</a>&nbsp;on Monday that the White House is open to resuming coronavirus relief talks with Democrats and is willing to provide more relief money in order to make a compromise.



TANGENT



After nine straight weeks of gains, the price of Silver plunged 14% on Tuesday, its biggest one-day loss since 2008. Gold also fell 5.5%, hitting its lowest level since last month.



SURPRISING FACT



So far, 448 companies in the S&amp;P 500 have reported second-quarter earnings, with nearly 82% beating Wall Street expectations—the highest rate on record dating back to 1994, according to Refinitiv data. Just over 16% of companies so far have failed to meet expectations.



FURTHER READING



<a href="https://www.forbes.com/sites/sergeiklebnikov/2020/08/11/goldman-predicts-at-least-one-vaccine-approval-before-the-end-of-2020-raises-gdp-estimate/">Goldman Predicts ‘At Least One’ Vaccine Approval Before The End Of 2020, Raises GDP Estimate</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/siladityaray/2020/08/11/russia-has-approved-worlds-first-covid-19-vaccine-putin-says/">Russia Has Approved World’s First Covid-19 Vaccine, Putin Says</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sergeiklebnikov/2020/08/10/dow-jumps-350-points-after-trump-signs-executive-orders-to-extend-coronavirus-relief/">Dow Jumps 350 Points After Trump Signs Executive Orders To Extend Coronavirus Relief</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sarahhansen/2020/08/10/mnuchin-says-white-house-is-willing-to-put-more-money-on-the-table-for-next-stimulus-bill/">Mnuchin Says White House Is Willing To Put ‘More Money On The Table’ For Next Stimulus Bill</a>&nbsp;(Forbes)



&#8211;Sergei Klebnikov, Forbes Staff

Russia Has Registered The Covid-19 Vaccine

Stocks Turn Negative After Russia Claims To Have World’s First Coronavirus Vaccine

Gold reached a record high of more than $2,000 an ounce on Tuesday, as investors, spooked by a weakening dollar, volatility triggered by coronavirus and ever rising U.S. cases, continue to look for a safe haven to move their money into.



<h2 class="wp-block-heading">KEY FACTS</h2>



<ul><li>Gold hit a high of $2,041.33 an ounce on Wednesday, after exceeding $2,000 for the first time on Tuesday.</li></ul>



<ul><li>The precious metal has gained more than 34% this year, making it one of 2020’s best-performing assets, Reuters&nbsp;<a rel="noreferrer noopener" href="https://uk.reuters.com/article/global-precious/precious-gold-cruises-to-new-high-above-2000-oz-idUKL8N2F7322" target="_blank">reports</a>.</li></ul>



<ul><li>Gold isn’t the only precious metal to have gained significantly, with the price of silver jumping to its highest level since 2013, and rising 50% overall this year.</li></ul>



<ul><li>The dollar weakened to two-year lows last week as lawmakers in Washington work to agree another stimulus deal.</li></ul>



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



Governments and central banks across the world are unleashing stimulus packages worth some $20 trillion into the global economy, according to the Bank of America, in a bid to boost output after the pandemic continues to halt major industries and force people to stay home. U.S. lawmakers are currently working to secure a further package of economic relief, and investors are concerned that stimulus packages will trigger inflation and devalue other assets. Meanwhile, escalating tensions between the world’s two largest economies, the U.S. and China, is likely to keep pushing gold upwards.



<h2 class="wp-block-heading">WHAT TO WATCH FOR</h2>



Gold’s impressive rally could well continue, analysts predict, as the pandemic shows little sign of slowing down, allowing battered industries to reopen and letting global economies recover. More than 18 million people have been infected so far, while the death toll topped 700,000 this week.



By Isabel Togoh, Forbes Staff

Is The Golden Bubble About To Burst?

Here’s Why Gold Has Topped $2,000 For The First Time

Covid-19 led eCommerce revolution



The Covid-19 crisis has redefined the retail playing field.&nbsp; This has seen retailers scrambling to accommodate changed consumer behaviour as shopping surges online.&nbsp;&nbsp;



The pandemic has exposed the precariousness of a solely bricks and mortar model.&nbsp;&nbsp;According to a recent report by&nbsp;<a href="https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/survey-south-african-consumer-sentiment-during-the-coronavirus-crisis" target="_blank" rel="noreferrer noopener">McKinsey</a>,&nbsp;consumers expect a relative shift to online shopping in most categories in the short term,&nbsp; driven primarily by a sharp decrease in in-store shopping. In the longer term, 40 percent of consumers plan to increase online shopping once the crisis is over.



Fear of infection drives move to online



“Previous epidemics have foreshadowed this online trend,”&nbsp;&nbsp;says Derek Cikes, Commercial Director at buy now pay later fintech, Payflex.&nbsp;&nbsp;



“The<a href="http://weforum.org/agenda/2020/05/digital-payments-cash-and-covid-19-pandemics/" target="_blank" rel="noreferrer noopener">&nbsp;SARS epidemic in 2003</a>&nbsp;expedited China’s path in launching digital payments and eCommerce in the country, creating a permanent shift in consumer behaviour.&nbsp; Similarly, the Coronavirus has caused a marked change in South Africa’s consumer behaviour and habits, with social distancing, hygiene measures and self-quarantine now integral parts of our everyday realities,” says Cikes.



With the crisis expected to remain for the foreseeable future, these behaviours are anticipated to become further entrenched and remain even as the crisis eventually ebbs.



Shopping:&nbsp; an altered reality



Shopping is no longer a leisurely, sensory-filled experience.&nbsp; Instead, retailers have replaced sampling of beauty items or delightful food temptations with an antibacterial touch averse world of hand sanitizers and plexiglass barriers.&nbsp;&nbsp;



This interaction or rather fear of interaction is driving new shopping behaviour, with consumers opting for the safety and convenience of eCommerce. And retailers are hastening to adapt to what they view as lasting changes in the way that people choose to shop as millions of consumers choose online as their preferred medium of shopping.



Epidemics’&nbsp;impact on retail



According to a&nbsp;<a href="https://public.tableau.com/profile/salesforcecommercecloud#!/vizhome/SalesforceShoppingIndex/SalesforceShoppingIndex" target="_blank" rel="noreferrer noopener">Global Shopping Index</a>&nbsp;published by Salesforce, the number of unique digital shoppers rose 40% year-over-year for Q1 2020.&nbsp;



In a South African context, 29% of online consumers say they are doing far more shopping online than before the coronavirus outbreak while 65% say they are visiting physical stores less, according to a&nbsp;<a href="https://www.nielsen.com/za/en/insights/article/2020/overcoming-online-shopping-obstacles-amid-lockdowns-in-africa-and-the-middle-east-is-not-only-retailer-driven/" target="_blank" rel="noreferrer noopener">Nielsen study</a>&nbsp;of 10 markets in Africa and the Middle East, including South Africa.&nbsp;



“The pandemic has fast-tracked trends that were already budding in the eCommerce space including digital and alternative payments.&nbsp;The 40% increase in shoppers and 25% increase in eCommerce merchant sign-ups to our platforms highlights this monumental shift towards digital as an increasingly preferred avenue of shopping and transacting,”&nbsp; says Cikes.



Cikes says the increased availability of click-and-collect models, digital payment models like buy now pay later platforms and other alternative payment options,&nbsp; as well as faster delivery models, are anticipated to further fuel this online revolution.&nbsp;



Global players wake up to eCommerce opportunity



Major tech and retailer stores are waking up to the huge potential of eCommerce as millions of consumers choose online space for their shopping. Facebook is making a major push into e-commerce with the launch of&nbsp;<a href="https://www.facebook.com/business/shops" target="_blank" rel="noreferrer noopener">Shops</a>,&nbsp;a way for businesses to set up free storefronts on Facebook and Instagram.&nbsp;



While<a href="https://edition.cnn.com/2020/06/10/business/zara-inditex-online-investment/index.html" target="_blank" rel="noreferrer noopener">&nbsp;Zara-owner Inditex&nbsp;</a>recently announced plans to close up to 1,200 smaller-sized stores, and to invest 3 billion dollars in digital commerce.&nbsp;



“Retailers and tech companies are recognising the significance, need and value to move online in order to accommodate consumer behaviour and sentiment for safer, seamless shopping alternatives.&nbsp; It will be interesting to see the kind of personalised, targeted spin they can put on it based on their collected user data around interests and geolocation,” says Cikes.



How SA retailers can harness this opportunity



The consumer mindset has changed in terms of their relationship to eCommerce.&nbsp; Online has become an accepted, go-to shopping alternative with the digital environment providing consumers with convenience, safety and access to a wide range of shopping options.



And while hygiene and safety concerns have provided the initial impetus in driving consumers online, shoppers have now experienced this environment as a feasible option with its accompanying convenience and benefits. This is entrenching the shift to online shopping, extending its impact to long after the pandemic has passed.



“We’re reaching a tipping point for eCommerce.&nbsp; Standalone bricks and mortar are no longer sufficient as consumers demand more rapid digitisation solutions.&nbsp; The fact that more people than ever are relying on the internet to shop for their everyday needs makes it imperative to have an online shopping model in order to remain competitive and viable.



The eCommerce revolution is here.&nbsp; Those that will survive will be retailers who have a multichannel approach to sales that provides customers with an option for a seamless shopping experience from the comfort of their own homes.&nbsp; This is no longer a luxury. It’s critical,” concludes Cikes.&nbsp;



&#8211; Paul Behrmann, Founder &amp; CEO of Payflex

Excited Woman Shopping Online At Home

Op-Ed: The eCommerce Lifeboat For South Africa’s Retail Industry

With Covid-19 emphasizing the human element in advertising, brands should re-evaluate their strategies and reframe their messaging to stay relevant. Saying nothing is wrong too, add experts.



“How do we respond to the biggest global conversation taking place?” asks Robert Grace, Founding Partner: Head Of Strategy, at M&amp;C Saatchi Abel, an integrated advertising agency with branches across Africa. “How are you actually going to match what you’re talking about with action?”



This is where advertising’s role becomes interesting, far from simply acting like a loudspeaker to products, or putting out mushy messages to engender brand loyalty.



How has marketing had to help brands pivot their messaging at this time?



The global pandemic is influencing every aspect of life. “I’ve never heard the word ‘unprecedented’ used so much. We’ve used so much hyperbolic language in this time,” says Grace.



From changing work cultures, to countries in lockdown facing economic crises, Covid-19 is impacting everyone in tangible ways. For agencies and by extension, brands, to pretend it’s not happening or go on with business as normal, reads as tone-deaf at best and disingenuous and ruthless at worst.



With that in mind, some brands have opted for silence, fearful of saying the wrong thing at the wrong time. “Saying the wrong thing is unforgivable – the consumer is smarter than they’ve ever been. You could have been in the right place but one wrong move could send you backwards,” explains Khuthala Gala-Holten, Managing Director at Joe Public in Johannesburg.



The risk of saying the wrong thing is paired with the risk of saying nothing at all. “Many brands have paused spending now, which is not the best thing to do, because people expect brands to play a role. 88% of consumers want brands to talk to them now,” says Shaun Frazao, Head of Digital at Wavemaker. The data backs this up – according to email service provider Everlytic, their March 2020 open rate was really high: 55.3 million unique opens.



Others that are still “talking” are dramatically pivoting on their marketing messages and communications.



“Whatever you say has to be authentic and not seen as a marketing opportunity,” explains Grace.



“There are some brands that should be going into quarantine over this period – don’t use this ‘opportunity’ to sell, rather use the time to refine your strategy. So that when you go back into the market, you demonstrate that you’ve understood what consumers will be wanting from your brand.”



Gala-Holten adds: “Strategy first – what are the guardrails? Sometimes clients have several agencies. So you really need to empower them with guardrails. This is now the ‘new normal’ – we will never be the same. From the creative perspective, in a way, it’s very exciting.”



Across sub-Saharan Africa, we’re seeing six key themes in communications and advertising, explains Frazao (see sidebar). “Consumer centricity needs to be first. Brands that are communicating now are looking long-term, to build trust, and not short-term at the sales they could make.”



Every agency interviewed for this article has seen a combination of two trends: contracts shrinking as businesses struggle to make money, and a shift to digital marketing. “The way business has been done will change in the advertising world. We have been moving gradually to a very focused marketing landscape, and this will be the tipping point to push them into that realm at a faster pace,” says Darren Leishman, CEO of Spitfire Inbound.



For digital agencies or agencies with digital service offerings, this shift has been less painful, but agencies with offerings like TV ads (that require crew and a studio to shoot in) and eventing (where large groups of people meet) are the hardest hit.



“People are spending more time online and media figures are reflecting higher views than normal for online ads. Clients are cutting spend in offline channels in favor of online ones. However, most brands remain very cautious with marketing spend in general at this time,” says Brian Carter, Executive Creative Director at Digitas Liquorice.



Clint Paterson, CEO at sport and entertainment agency Levergy, adds: “New behaviors and lifestyles will take root, but it’s critically important to remember, people’s passions won’t die. The role of the brand or event owner becomes one of adaption here, how can relationships be reinterpreted, reinvented and reimagined to generate the kind of connection with audiences appropriate to this new normality?”



Grace puts it another way: “Any cracks you had before Covid-19 will turn into gaping holes.”



Diana Springer, Partner: Head of Strategy for strategic consultancy Black &amp; White, adds marketing as a whole has become increasingly performance-based and goal-orientated. But in unforeseen times, “brands have to reframe what they’re measuring,” says Springer. “Otherwise, they can lose relevance. You have to change how you define success to shift your strategy. This pandemic is really making us consider the fundamentals.”



<hr class="wp-block-separator"/>



‘6 Marketing Themes FOR This Time’



Shaun Frazao, Head of Digital at Wavemaker, advises six key pandemic-driven themes in marketing for Africa:



<ul><li>Supporting the frontline workers</li><li>Repurposing production (instead of making products, brands are making products to help their consumer, such as South African Breweries donating alcohol to make hand-sanitizer)</li><li>Helping the vulnerable</li><li>Health messages (posters on social distancing, Pick n Pay’s message to avoid panic buying, and SA Tourism advising people to travel later)</li><li>Making staying at home easier (brands are trying to be empathetic by making staying at home easier, like Vumatel increasing internet speed for free)</li><li>Distributing positivity (Nandos’ latest ad is all about remaining positive, and Nike did something similar).</li></ul>







&#8211; Samantha Steele

gettyimages-1074291718-170667a

Why It Must All Ad Up

With the grounding of the global aviation industry, the money-spinning meetings and events sector is also on a downward spiral. Will local tourism lead its recovery?



Mauritian bride-to-be, Olivia Maurel, was all set for the wedding of her dreams at the end of April. But with Covid-19 playing party pooper, she had to make the heart-rending decision of postponing her nuptials. With three-quarters of her guest-list expected to fly into the sunny island of Mauritius, from every corner of the globe, she had no other option.



“The risks of countries closing borders and key people, such as my fiancé’s grandmother, being unable to come from England, was a huge motivator for us to [postpone],” says Maurel.



The billion-dollar global wedding industry will probably not see any big bridal gatherings for months to come. The cognac and crystal will have to wait so long as Covid-19 is the only attendee that has RSVP-ed.



With the coronavirus cancelling significant conferences and business gatherings worldwide such as the Adobe Summit and the Game Developers Conference; as also mega sports, social and entertainment events such as Coachella, the Cannes Film Festival and the 2020 Tokyo Olympic Games, the meetings, incentives, conferences and exhibitions (MICE) industry is facing the annihilating prospect of empty venues and nil revenue. Closer home, in Africa, events such as IAB Bookmarks Awards and Summit; and lifestyle and entertainment events such as AfrikaBurn, the Cape Town International Jazz Festival and the Bushfire Festival hosted in Swaziland every year, have all been casualties. And alongside that reality, life-changing events such as graduations, anniversaries and funerals are now being conducted on laptop screens.



The meetings and events industry has been impacted disproportionately by the virus. Unlike many other economic activities, the events industry is based on physical interaction between people. It’s a type of tourism in which conventions of large groups, usually planned well in advance, are organized at a physical destination.



Securing major conference events can benefit the local economy of the host city or country – particularly attracting business travelers. Research shows that business travelers are the golden goose in the travel industry. Unlike leisure travelers, they, or their sponsors, often spend more money.



&nbsp;According to the South African Tourism (SAT) board, the events industry, directly and indirectly, sustains more than 250,000 jobs and contributes an estimated R115 billion ($6.2 billion) to the country’s economy.



“Every year, South Africa hosts 211,000 regional, national and international meetings, conferences and exhibitions,” says the CEO of SAT, Sisa Ntshona. “The industry has undoubtedly been heavily hit by this pandemic, which also has negative bearings on employment and the continuity of businesses in the tourism sector.” Annually, the country attracts a million international delegates for business.



As the virus continues to sweep the continent, abandoned halls and venues are being transformed into field hospitals to be used as treatment centers for patients. South Africa’s minister of health Zweli Mkhize announced in May plans to convert the Cape Town International Convention Centre to become a temporary hospital with 857 beds for patients unable to effectively self-isolate until they are no longer infectious. This comes after the FNB Stadium in Johannesburg was earmarked for the same.



A report issued at the end of March by the World Tourism Organization (UNWTO) estimates international tourist arrivals could decline by 20% to 30% in 2020 based on the latest measures taken by governments, businesses as well as the patterns observed from previous global crises. The impact thereof translates to a loss of $300 billion to $450 billion in international tourism receipts (exports). Ntshona cautions to interpret data prudently given the magnitude, volatility and unprecedented nature of the crisis. “The true effect may only be accurately calculated and reflected much later,” he says.



&nbsp;It’s crucial to understand how Africa was positioned pre-pandemic. Henk Graaff, who runs SW Africa, a boutique destination management company in Johannesburg specializing in inbound tourism in the MICE, luxury, golf and leisure travel segments in Africa, affirms the continent has been an attractive destination for tourists, corporates, event planners, weddings and honeymoons. Countries such as South Africa, Namibia, Botswana, Victoria Falls (Zimbabwe and Zambia), Zanzibar (Tanzania), Kenya, Rwanda and Uganda were seeing increased interest and growing in popularity as events destinations.



It’s unsurprising as Africa offers a vast array of exceptional, customized and personalized locations that exceed expectations. This is strengthened by improved infrastructure, accessibility, expansion of flights and connectivity services within the region from major source markets such as Europe, Asia and America. Attractions such as the wilderness, the Masai Mara and the mountain gorillas of East Africa are now easily accessible.



But at this time, businesses such as SW Africa are strained and seeking relief. “We received both cancellations and postponements, some of which led to demands for refunds from us and in turn from our suppliers, some of whom have been more flexible than others, leading to tension in supply chain relations,” says Graaff.



&nbsp;He is pleading with suppliers to become ultra-flexible post the lockdown with regards to price, pre-payment and cancellation terms. He believes this will minimize or eliminate the perceived risk in the eyes of potential clients, who will be both relatively budget-conscious and risk-averse.



Maurel was luckier as her suppliers were more accommodating. “Thankfully, everyone has been super-understanding, and we’re all working together to find something that works for everyone’s schedules,” she says. “Luckily, my wedding dress wasn’t finished when lockdown started, so it’s still at Robyn Robert’s studio – if it hadn’t been, I would’ve been so tempted to run around in it and have a Friends moment!”



&nbsp;However, some suppliers in the value chain are grappling with an even tougher predicament. According to the International Air Transport Association (IATA), no airline, regardless of how well-capitalized, would be able to absorb the impact of the Covid-19 groundings for a prolonged period. The government-imposed travel ban, social distancing and maximum limits to gatherings have caused a steep decline in passenger demand for air flights to which airlines have responded by reducing their scope of operations and costs. Many airlines have been forced to park their fleets, with most seeking financial support and debt relief measures amid the low, in some cases, non-existent demand.



&nbsp;All African countries will feel the impact relative to the scope of their aviation industries, according to aviation specialist and analyst, Joachim Vermooten.



“The regulatory imposition of travel bans to and from specific states and later to airline operations have brought most scheduled commercial airline operations to a halt. Some one-way directional charter and cargo opportunities have arisen, but these are insufficient to maintain any scale of network operations,” says Vermooten. As a result, airlines are now focused on cash retention and several relief measures, including compulsory leave for staff and issuing travel vouchers and re-bookings, instead of ticket refunds to customers. The battle is uphill as several African carriers have remained financially distressed ahead of the pandemic. Air Namibia and South African Airways (SAA), for example, have been facing severe operating issues.



As global citizens navigate the new ways of engaging and working during the lockdown, technology has been both an aid and a threat to the tourism and MICE sector.



Organizations and individuals have embraced and leveraged technology to facilitate interactions. This includes the massive adoption of tools such a Zoom, Microsoft Teams and Skype. We are also seeing national tourism boards innovating through virtual reality to give travelers delightful “insperiences” from the comfort of their quarantined corners.



&nbsp;To avoid minimum job losses and devastating economic damage, South Africa’s department of tourism has made R200 million ($10.8 million) available to assist small-medium enterprises (SMEs) in the tourism and hospitality sector who are under particular stress due to the lockdown restrictions.



In addition, SAT is in the process of developing an industry-wide recovery plan. “To ensure that this plan is robust, we are consulting the tourism sector from the large listed players to the SMEs to input into this plan. This plan will be a blueprint on how we move forward as an industry,” Ntshona says.



&nbsp;With the end of the pandemic indeterminable, it’s currently impossible to speculate what lies on the other side. Due to seasonality and strong preventative measures taken by most African governments, the entire continent has the least positive cases and deaths from Covid-19 than other sovereign states. This might be advantageous for marketing African destinations to be considered relatively safer during the recovery phase. “At the heart of our recovery, will be domestic travel,” says Ntshona.



Even so, domestic travelers may initially favor alternative modes of travel to air, such as motor vehicle travel, further adding strain to the aviation industry.



&nbsp;This is echoed by Graaff who believes domestic travel will lead the recovery, and then demand will expand to neighboring destinations and eventually further afield.



It may be a while before a new recovery path is defined, but for now, everything hangs in the air.



&#8211; Mashokane Mahlo-Ramusetheli

Travel ban. Quarantine countries and closing borders in the world.

The Turn of Events: Will Local Tourism Lead The Recovery Of The MICE Sector?

Even the most unconventional businesses, such as a Cape Town candy shop, are selling masks to face off the economic crisis. 



In less than three weeks, ProudlySA’s newly-launched online portal for local manufacturers of masks hit 400 sellers. Collectively, these mask-makers have the capacity to produce around 14 million masks per week, says ProudlySA’s Deryn Graham, and those are only the manufacturers registered to the clothing sector’s National Bargaining Council.



Masks are a necessary accessory in the fight to prevent Covid-19 from spreading and companies around the world are shifting their core operations to crank out personal protection equipment (PPE).



Besides high-end designer brands like Louis Vuitton and Chanel now making eye-catching masks, many African businesses are pivoting their core operations to keep their businesses afloat.



“I decided to make masks purely to access a new revenue stream. I had been able to sell my socks online during the first level of lockdown, but I wasn’t authorized to ship them as they weren’t classified ‘essential goods’,” explains Chelsey Wilson, FEAT. sock co.’s co-founder and designer from Cape Town. What was holding Wilson back, initially, was that she didn’t want to make masks using generic, store-bought fabric.



“I wanted to keep true to my brand, which is all about bold and unique prints… I had to use custom-printed fabric I already had that made around 100 masks which all sold out in the space of three hours,” says Wilson, adding that given the demand, she should be able to sell around 300 masks a week going forward.



Jinae Heyns is the co-owner of Matsidiso, an ethical footwear and accessories brand with flagship stores in Stellenbosch and De Waterkant in Cape Town. For her, making masks was not a choice, it was a matter of survival: “We didn’t want to just make masks, we wanted to ensure that we were able to feed our team and do our part to support those who cannot easily afford or access proper masks.”



Matsidiso currently sells around 8,000 masks a month. Elastic is in low supply countrywide and what is left is being reserved for the medical industry. Matsidiso, which operates out of a family-run dancewear factory, uses lycra for their mask ties: “I care deeply about sustainable practices, and with masks, it’s no different. We have the material in-house,” adds Heyns.



Wendren Setzer from The Wren Design, a Muizenberg-based South African company that hand-makes environmentally-friendly bags and accessories using recycled cement packaging paper, had a unique challenge. With the capacity to create 1,000 masks a week, Setzer’s first obstacle was developing a paper prototype.



“We wondered how we could make a face mask out of paper? Several prototypes later, we developed two unique mask patterns. We also researched coatings and found a way to coat the paper to offer more – the paper is coated with Si02 and a second layer of SiAg02 is applied making the surface anti-microbial,” explains Setzer.



Although Cheaky Co traditionally sells confectionery, Lucas R Adams, its founder and Sea Point-resident in Cape Town, decided to launch two different masks into his online store.



“We’ve been selling weekly quantities within the hundreds,” says Adams. “There’s obviously been a massive spike in the production and sale of fabric face masks by those within textiles, but it soon dawned on us we hadn’t yet seen anyone within the food category offering them, so we thought, ‘why not add a small range for our community’? In the end, we thought that offering the option to add a mask to one’s cart when shopping our plant-based treats was a no-brainer…”



For many small businesses, the decision to make masks is the only way to potentially weather the pandemic. It’s about turning non-essential production lines into essential manufacturing businesses.



According to a Stanford University study, masks are the first step in reopening the economy (and may help with transitioning into a post-Covid world).



“These business owners are not only fighting for themselves; they do what they do to a great extent to ensure the safety of their entire team and because they want to see South Africa thrive. At the end of the day, these aren’t just masks, but actual protective gear that could help save a life,” ends Heyns.



-Tiana Cline

Category: Economy

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