Debating Ideas aims to reflect the values and editorial ethos of the African Arguments book series, publishing engaged, often radical, scholarship, original and activist writing from within the African continent and beyond. It offers debates and engagements, contexts and controversies, and reviews and responses flowing from the African Arguments books.
When Covid-19 reached South Africa, the government responded aggressively, introducing a complete lockdown on 26 March 2020 that lasted for five weeks. The early success of the lockdown in stemming transmission came at the cost of an unprecedented hunger crisis. During the first lockdown, 3 million people lost their livelihoods and 47% of households ran out of money to buy food. Moreover, despite temporarily stemming the spread of the disease, the hard lockdown ultimately failed to prevent a huge death toll, which was significantly higher than in any other country on the continent.
Spazas (small consumer goods retailers) and tuck-shops are a major source of employment and a critical element of household food security strategies. While the government provided initial reassurances that spaza shops could remain open and would be supported through the crisis, the lockdown for many small and informal retailers was catastrophic. Their plight sheds light on why deaths and hunger both escalated, despite government attempts to stem them. The crisis also exposed the vulnerabilities for small retailers caused by a bloated corporate retail sector that has expanded into rural areas.
Small and informal retailers’ experiences during Covid-19
We conducted research in a rural area in the north of the province of KwaZulu-Natal, speaking to spaza and tuck-shop owners, small vendors, farmers, and residents. With limited cash reserves and small customer bases, many small businesses were vulnerable to shocks. One shop owner told us that her business almost collapsed. Even before Covid-19, she said, it was financially at risk. But when Covid-19 arrived, “lockdown” regulations and rising food prices – caused by panic buying and sudden changes in various countries’ export policies — were turning consumers away. She had a long list of indebted customers who went from one shop to another, accruing multiple debts because of rising costs of food, which were subsequently compounded by the war in Ukraine.
Most spazas endure the risk of selling goods on credit because in the short term it offers flexibility to consumers, a service not provided by the larger stores. Over the long term it allows them to build up trust-based relationships with customers. For residents, such arrangements provide essential access to food especially at the end of the month when money runs out. But the risks it entails also makes small businesses more vulnerable when an unexpected crisis hits.
Sales dropped during lockdown. The flow of people passing by shops on their way to and from school and work ceased. The banning of community events such as weddings and funerals also had a huge impact, as these gatherings brought many people to sparsely populated areas, and typically were times of peak sales. Workers employed by informal enterprises lost jobs without warning and with no protection from state regulations.
Some shop owners were afraid to travel to the wholesalers to restock due to police patrols, while others reported wholesalers themselves running out of stock. Eventually, their shelves became empty. One spaza owner explained that during lockdown: ‘we became useless to the community that had trusted us, because they couldn’t just go around looking for food’. Instead, residents travelled to larger stores in towns to get food, increasing the risk of transmission.
Inadequate assistance for spazas: a missed opportunity
The government recognised that small businesses were at risk. They offered support in the form of an emergency financial relief fund. However, the fund was available neither to informal traders nor to foreign nationals, making most small enterprises in rural areas ineligible. Mostly reliant on cash transactions, they also did not have the records that digital transactions provide, needed to access credit. Many were too small to become formally registered. Others may have opted to remain outside of regulatory frameworks because of poor employment practices. Instead, an urgent strategy was needed to link up the needs of communities with those of small businesses.
Communities had two essential needs: to maintain food security and to avoid Covid-19 transmission. Located near to homes and providing an alternative to the clustering of people in supermarkets, spaza shops could have performed an essential role in both. Food could have been distributed to rural areas by mobilising this existing network of small supply chains. Corporate food suppliers could have helped in this effort. For example, the bread company Sasko delivers bread regularly by truck to remote rural locations, and therefore has a deep knowledge of the geographies of rural food retail.
The government’s main response to skyrocketing hunger levels was to introduce new cash transfers. These were essential, although many of our respondents said that with prices rising so quickly, this money was going via them directly into the hands of the supermarket retailers. The government’s reliance on the corporate food retail sector to guarantee food supply led to a missed opportunity during Covid-19. Much more could have been done to ensure food security during ‘lockdown’. By making use of an informal food infrastructure whose supply chains extend all the way to remote villages, government could work with, rather than against, the grain of rural livelihoods and food acquisition strategies.
Public health experts state that another pandemic like Covid-19 is inevitable. Emerging from the Covid-19 crisis is an opportunity to recognise the significant role of spazas and informal retailers in providing employment and food security in South Africa. Well-established spazas should be registered so that employees are protected by regulatory frameworks. Smaller shops should be supported to transition to digital payments if they wish, enabling them to generate records and access financial relief during future emergencies. A policy review should investigate how informal retailers are affected by supermarket expansion and how small, frequently female owned stores face competition from larger spazas that are operated by wholesale businesses. It should identify possibilities for reconfiguring supply chains to enable them to source directly from manufacturers or cheaper wholesalers, rather than depending on their competitors in nearby towns. With financial support and inclusion, informal retailers will be best placed next time to assist communities in accessing food near to their homes, reducing transmissions and preventing food insecurity.