A Thematic Analysis of The Challenges Faced by SME’s during Uncertain Times in KwaZulu-Natal: A case of DACT Beneficiaries


  • Silindile Zanele Maureen Khoza Management College of Southern Africa (MANCOSA)
  • Adeshina Olushola Adeniyi Department of Entrepreneur Academy, University of Mohammed VI Polytechnic https://orcid.org/0000-0002-2912-4563
  • Ayansola Olatunji Ayandibu Department of Business Management, University of Zululand


SMEs, Covid-19, civil unrest, business challenges, small business


The small businesses in South Africa exist to help with solutions that respond to the overall economic and social development challenges such as the high levels of unemployment, poverty and inequality. The government’s role has always been to make the business environment conducive for all businesses to thrive. Despite the efforts by government, SMEs still experienced several challenges that impede their opportunity to grow and be sustainable in order to fulfil government and society expectations. This study aimed at investigating the challenges faced by SMEs during uncertain times of Covid-19 and Civil unrests within KZN. The study also explored the recommendations to take in order to rebuild again and also to better prepare for future uncertain events. A case study research design was used. The study used a qualitative research approach to gather an in-depth understanding of the challenges faced and actions taken by DACT incubate in KZN. The sample size of 10 SMEs owners was selected from the targeted population of 80 SMEs. The data generated through online zoom interviews was analysed using NVivo 12 software to create themes and sub-themes based on the research questions. The findings indicated that there is a lot of challenges experienced by SMEs that were exacerbated by the outbreak of Covid-19 pandemic and the Civil unrests. These challenges included downsizing employees, losing customers, reducing production due to unavailability of raw materials, losing production time, and drastic drop in sales. Most of SMEs also could not even access purchase order or short-term funding, and available relief support schemes. In conclusion, the study identifies some key recommendations on what DACT incubate, private sector and government can do to respond to SMEs challenges to help them rebuild and contribute to solving economical and societal challenges.

Author Biographies

Silindile Zanele Maureen Khoza, Management College of Southern Africa (MANCOSA)

Khoza is the First author

Adeshina Olushola Adeniyi, Department of Entrepreneur Academy, University of Mohammed VI Polytechnic

second author

Ayansola Olatunji Ayandibu, Department of Business Management, University of Zululand

Third author


Abdullah, F., Myers, J., Basu, D., Tintinger, G., Ueckermann, V., Mathebula, M., Ramlall, R., Spoor, S., deVilliers, T., Van der Walt, Z., Cloete, J., Soma-Pillay, P., Rheeder, P., Paruk, F., Engelbrecht, A., Lalloo, V., Myburg, M., Kistan, J., van Hougenhouck- Tulleken, W., Boswell, M., Gray, G., Welch, R., Blumberg, L., and Jassat, W. (2022) Decreased Severity Of Disease During the First Global Omicron Variant Covid-19 Outbreak In a Large Hospital In Tshwane, South Africa, International Journal of Infectious Diseases. 116, 39.

Akpata, U., Oyedele, T., and Agbeyi, E. (2020). PwC’s MSME Survey 2020: building to last. Nigeria: PwC.

Arnold, C. (2019). The foundation for economies worldwide is Small Business [online]. International Federation of Accountants. Available from: https://www.ifac.org/knowledge-gateway/contributing-global- economy/discussion/foundation-economies-worldwide-small-business-0 [Accessed on 9 October 2021].

Bayraktar, M. and Algan, N. (2019). The importance of SMEs on world economies. Çukurova University, Turkey Pp.57-59

Bure, M., and Tengeh, R. (2020). Implementation of internal controls and the sustainability of SMEs in Harare in Zimbabwe. Cape Peninsula University of Technology.

Congressional Research Service (2020). Global economic effects of Covid-19. Retrieved from https://fas.org/sgp/crs.

Cusmano, L. Koreen, M. and Pissareva, L., (2018). 2018 OECD ministerial conference on SMEs: Key Issues Paper, Centre for Entrepreneurship, SMEs, Local Development and Tourism, Mexico City, p.6

DACT (2021b). 2020/2021 Annual Report. Richards Bay: DACT

Deb, P., Furceri, D., Ostry, J. D., & Tawk, N. (2021). The economic effects of Covid-19 containment measures. Open Economies Review, 1-32.

Drees, J.M. and Heugens, P.P. (2013), “Synthesizing and extending resource dependence theory: A meta-analysis”, Journal of Management, 39(6), 1666-1698.

Fatoki O, Garwe D. (2010). Obstacles to the growth of new SMEs in South Africa: A principal Component analysis approach. African Journal of Business Management, 4(5): 729- 738.

Fatoki, O. (2018). The impact of entrepreneurial resilience on the success of Small and Medium Enterprises in South Africa. Economic and Business Aspects of Sustainability. 10(7), 2527.

Finfind (2020). The SA SMME Covid-19 Impact Report. November, 3-5.

GEN 22 On Sloane (2020). Covid-19 Impact on South Africa’s SMMEs. April, 8-1

Government of Canada. (2021). Key Small Business Statistics. Available at: https://www.ic.gc.ca/eic/site/061.nsf/eng/h_03147.html

Harper, P. (2021). Riots, looting cost the KwaZulu-Natal economy R20 billion – Mail & Guardian [online]. Available from: https://mg.co.za/news/2021-07-20-riots-looting- cost-the-kwazulu-natal-economy-r20-billion/ [Accessed 10 October 2021].

Herr, H. and Nettekoven, Z.M. (2018). The role of Small and Medium-Sized Enterprises in development: What can be learned from the German experience? Global Labour University Working Paper. 53, 6-9.

Insurance Journal (2021). Uninsured South African businesses, wrecked by civil unrest, struggle to recover [online]. Available from: https://www.insurancejournal.com/news/international/2021/07/15/622803.htm [Accessed 10 October 2021].

Klein, L. L., and Pereira, B. A. D. (2016). The survival of interorganizational networks: a proposal based on resource dependence theory. RAM. Revista de Administração Mackenzie, 17, 153-175.

ISED (2021). Key Small Business Statistics 2021, 1718-3456, 7-8.

Kowo, S., Adenuga, O., and Sabitu, O. (2019). The role of SMEs development on poverty alleviation in Nigeria, Insights into Regional Development, Entrepreneurship and Sustainability Center. 1(3), 215-217.

Liedtke, S. (2019). SME Sector critical’ to growing South Africa’s economy – Pityana [online] Available from: https://www.engineeringnews.co.za/print-version/sme-sector-critical- to-growing-south-africas-economy-pityana-2019-04-11 [Accessed 9 October 2021].

Masroor, N. and Asim, M. (2019). SMEs in the contemporary era of global competition. University of Karachi, Karachi

Moos, M. and Sambo, W. (2018). An exploratory study of challenges faced by small automotive businesses in townships: The case of Garankuwa, South Africa, Journal of Contemporary Management. 15(1), 467-494.

Narula, R. (2004). R&D collaboration by SMEs: new opportunities and limitations in the face of globalisation. Technovation, 25(2), 153-161.

National Youth Development Agency (2020). Impact of Covid-19 on Small Medium and Micro Enterprises since lockdown: Survey Report. September, 13-14.

Ndiaye, N., Abdul Razak, L., Nagayev, R. and Ng, A. (2018). Demystifying Small and Medium Enterprises’ (SMEs) Performance in emerging and developing economies, Borsa Istanbul Review. 18(4), 269–280.

Nieuwenhuizen, C. (2019). The effect of regulations and legislation on small, micro and medium enterprises in South Africa, Development Southern Africa. 36(5), 666-677.

OECD (2018). OECD Studies on SMEs and Entrepreneurship SME and Entrepreneurship Policy in Indonesia 2018 [online]. Available from: https://books.google.co.za/books?id=Aj1yDwAAQBAJ&printsec=frontcover&source =gbs_ge_summary_r&cad=0#v=onepage&q&f=false [Accessed 9 October 2021].

Omar, A. R. C., Ishak, S., and Jusoh, M. A. (2020). The impact of Covid-19 Movement Control Order on SMEs’ businesses and survival strategies. Geografia, 16(2).

Pfeffer, J., and Salancik, G. R. (1978). The external control of organizations: A resource dependence perspective New York: Harper and Row.

Pfeffer, J., and Salancik, G. R. (2003). The external control of organizations: A resource dependence perspective Stanford: Stanford University Press.

Roundy, P.T. and Bayer, M.A. (2019), "To bridge or buffer? A resource dependence theory of nascent entrepreneurial ecosystems", Journal of Entrepreneurship in Emerging Economies, 11(4), 550-575. https://doi.org/10.1108/JEEE-06-2018-0064

Schiele, H., Ellis, S. C., Eßig, M., Henke Jr., J. W., and Kull, T. J. (2015). Managing supplier satisfaction: social capital and resource dependence frameworks. Australasian Marketing Journal, 23(2), 132-138.

SEDA (2021). SMME Quarterly Update 3rd Quarter 2020 March, 16-21.

Segal, S., and Gerstel, D. (2020). The Global Economic Impacts of COVID-19, Critical Questions, Center for Strategic and International Studies (CSIS). Retrieved from https://www.csis.org/analysis.

Smith-Bingham, R, and Hariharan, K. (2020). This is the impact of the Coronavirus on business. World Economic Forum. Retrieved from https://www.weforum.org/agenda

South Africa (2019). National Small Enterprise Act. Schedule 1 Amendment. Notice No.399. Government Gazette. 42304:15 March.

South Africa (2019). Revised Schedule 1 of the National Definition of Small Enterprise in South Africa. Notice No.399. Government Gazette. 42304:110-111 March.

Stainton, H. (2021). Positivism and Interpretivism: A Simple Explanation [online]. Available from: https://tourismteacher.com/positivism-and-interpretivism-simple-explanation/ [Accessed 13 January 2022].

StatsSA (2019b). ’Quarterly Labour Force Survey 2019: Quarter 1’. Pretoria: Statistics South Africa. https://www.datafirst.uct.ac.za/dataportal/index.php/catalog/764/get_microdata

Su, F., Khan, Z., Kyu Lew, Y., Il Park, B. and Shafi Choksy, U. (2020). Internationalization of Chinese SMEs: The role of networks and global value chains, BRQ Business Research Quarterly. 23(2), 140-158.

United States Small Business Profile. (2020). Available online: https://cdn.advocacy.sba.gov/wp-content/uploads/2020/06/04144224/2020-Small- Business-Economic-Profile-US.pdf

Vilakazi, T., and Paelo, A. (2017). Towards the integration of markets: Competition in road transportation of perishable goods between Malawi, South Africa, Zambia, and Zimbabwe. WIDER Working Paper 2017/46. Helsinki: UNUWIDER.

Villanueva, J., Van de Ven, A. H., and Sapienza, H. J. (2012). Resource mobilization in entrepreneurial firms. Journal of Business Venturing, 27(1), 19-30.

Voeten, J., and Marais, B. (2016). South Africa: Qualitative Study on Innovation in Manufacturing Small and Medium Sized Enterprises (SMEs): Exploration of Policy and Research Issues. Tilburg University.

Vuba, S. (2019). The missed opportunity: SMMEs in the South African economy [Online] Available from: https://mg.co.za/article/2019-04-12-00-the-missed-opportunity- smmes-in-the-south-african-economy/ [Accessed 24 March 2022].

Wankhede, V.A. and Vinodh, S. (2021), "Analysis of barriers of cyber-physical system adoption in small and medium enterprises using interpretive ranking process", International Journal of Quality & Reliability Management, Vol. ahead-of- print No. ahead-of-print. https://doi.org/10.1108/IJQRM-06-2021-0174

World Health Organisation. (2021). Weekly epidemiological update on COVID-19 - 21 December 2021. Accessed Online (28 March, 2022). https://www.who.int/publications/m/item/weekly-epidemiological-update-on-covid- 19---21-december-2021

Writer, S. (2021). South Africa Unemployment Rate Hits New Record High [online]. Available from: https://businesstech.co.za/news/government/515388/south-african- unemployment-rate-hits-new-record-high/ [Accessed 9 February 2022].

Zilwa, P. (2019). Business development services (BDS) and SMME development in South Africa. (M. Com Dissertation), University of Cape Town, Faculty of Commerce.