Billions lost in cultural and creative industries due to Covid-19 impact

Image: 123RF/Jarun Ontakrai

The impact caused by Covid-19 total shutdown to the local cultural and creative industries (CCI) is more than R53 billion.

This was revealed by a new study released by South African Cultural Observatory (SACO) on Thursday and it was conducted between March 20 and May 4.

The online survey looked at the impact that lockdown had on businesses and freelancers in the sector. When the survey was conducted, all 95 percent of respondents had experienced cancellation or indefinite postponement of work scheduled between the start of the survey and the end of the year. On average 63 percent of all respondents experienced cancellation of work that had been scheduled before the end of April 2020.

A further 30 percent experienced cancellation, or indefinite postponement, of work that had been scheduled before the end of May. Another quarter had work that was scheduled before the end of June cancelled or indefinitely postponed. A smaller proportion of about 12 percent experienced longer term cancellations or indefinite postponements, with work that was scheduled before the end of December having been postponed or cancelled. The report further shows that the sector shutdown is expected to reduce South Africa’s GDP (direct and indirect impact) by R99,7 billion in 2020.

About 595 usable responses from all parts of the sector, which includes performing arts, heritage, publishing, music, film and video, and design, were received. Thirty eight percent of responses were from firms with employees, and the other 62 percent were from individual freelancers. About 65 percent are operating formal (registered) businesses and 35 percent percent were informal, or unregistered, and while 82 percent have a yearly turnover of less than R5 million (micro-enterprises).

Sixty nine percent of the 69 percent of respondents said that their mode of production was mostly via live, face-to-face activities. At the early stage of the lockdown, 21 percent of employers reported that they were continuing to pay all their employees their normal salaries, and only 7 percent of employers reported retrenching permanent employees. However, 29 percent said that they were ending the employment of short-term employees (people working on short-term contracts, or informally), and a further 25 percent reported reducing the salaries of employees during the shutdown.

The survey further found out that at least 40 percent of those surveyed were using reserves to survive, while 21 percent were getting support from family and friends. SA Cultural Observatory executive director, Unathi Lutshaba said: “We are hopeful that the report provides relevant insights about the impact of the Covid-19 pandemic, and will jolt both decision makers in the public and private sectors as well as the society at large to think deeply about the role we can all play to contribute in supporting the sector.”

The survey analysis by domain showed that performance and celebration were the most vulnerable (because of the high proportion of freelance and face-to-face production), followed by audio-visual and interactive media (who distribute their work remotely, but whose production depends on face-to-face interaction).

The report rated visual arts and crafts third most vulnerable, despite their relatively low face-to-face production mode. The report further looked at the scientific rigorous impact evaluation of the reduction in CCI activity because of the Covid-19 shutdown on the South African economy.

Their findings showed that more than 85 percent of respondents had experienced a drop in business turnover in the first 2 weeks of the lockdown, and that while 50 percent would not reduce their workforce in the short term (within 2 weeks of the survey), 37 percent said that they expected their workforce to decrease in size in the following period.

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