SELEBI- PHIKWE: The private sector, especially small business, is reeling from the effects of financial troubles that bedevil the townâ€™s economic mainstay, BCL Mine. A member of Small Business Council (SBC), Palalani Moithobogi said BCL was the heart of the copper/nickel town; hence whatever happens to it affected the economy of the town.
Moithobogi, also the managing director of Kwebo Management Consultants, said small businesses relied on BCL mine for financial and economic boost.
He said small businesses would be forced to shut down if the BCL did not have money. Due to low international commodity prices, BCL is reportedly facing a dire cash flow dearth, which has seen the company fail to pay most of its creditors on time.
“Small businesses will not be able to carry on operating because some of the businesses rely on the BCL mine,” he said. “Although they might not be getting money from BCL mine directly, BCL mine employees buy goods and services from them and once the employees are not paid that means the demand goes down.”
He said some businesses could not afford to buy stock due to lack of operational funds while some already failed to pay their employees and if there was no immediate improvement they would be forced to retrench employees. According to Moithobogi, if the BCL mine financial crisis persisted, the economy of Selebi- Phikwe would go down and people would be left without jobs.
“The impact is massive to small businesses and most of them will be forced to shut down,” he feared.
The SBC member said small businesses were unable to borrow money from banks; and, unlike the BCL mine they would not be able to sustain themselves for a long period.
Businesses that borrowed money from banks were failing to pay instalments and by the time the town recover from the BCL mine financial crisis, they would be working to clear bank debts. He added that if the BCL financial troubles persisted, the banks would not fund small businesses because of uncertainty over payments.
“I believe that banks are more cautious now on who they borrow money to and on the kind of businesses they give loans,” he said.
He added that if the economy went down, banks automatically pull off too. He warned that the situation would definitely go out of control if it was not addressed quickly.
Moithobogi said he expected SPEDU to take part in resolving the challenges faced by the town.
“Small businesses are suffering right now and everyone is blaming the BCL mine about the situation,” he said. “SPEDU should also play its part.”