Before the global Covid-19 pandemic, the local mining, construction and agricultural sectors were already grappling with various challenges. Weak global demand triggered a commodities slump, while low local economic growth, policy, land and regulatory uncertainty, and labour disruptions impacted domestic operations. The pandemic’s economic impact has magnified these challenges: it affected exports due to ports closures and government-mandated restrictions on operations.
From a construction point of view, we have also seen many contracts being put on hold, as well as project cancellations — some manufacturing plants that were in the pipeline have been halted or cancelled. And while agriculture was declared a critical industry and was exempt from the harshest lockdown regulations, food production value chains were not at optimal levels, causing bottlenecks and blockages that led to product losses.
In addition, this flexible funding model allows these businesses to expand their productive asset base operations ramp up, or in response to market opportunities as local and global economic conditions improve. In fact, in these instances, accessing asset finance on a lease or rental basis can help miners fund new and used assets on repayment plans that match the business’s current cashflow, while spreading the cost of productive assets in line with the revenue they generate.