Four years after the Covid-19 pandemic was declared a global public health emergency, Malawian small-scale businesses are yet to recover from the negative impact of the disease that slowed down economic activity.

A partial lockdown declared on April 4 2020 following the confirmation of the first cases of Covid-19 in the country resulted

 in restrictions on travel, closure of borders, limiting numbers in public gatherings and encouraging social distancing, all of which affected operations of micro, small and medium enterprises (MSMEs).

Cross-Border Traders Association of Malawi chairperson Steven Yohane said in an interview on Friday that his business has stagnated since the pandemic hit the country.

He said the pandemic ate into his capital and his business lost its market as travel and business operations were limited. He said recovery has been difficult.

Said Yohane: “Business has not been back to normal since. Along came devaluation of the kwacha, high cost of living and foreign exchange challenges, making our businesses unstable.”

Sharing similar sentiments, Ruth Whayo, who before the pandemic was operating a salon in Blantyre, said she has scaled down her business due to economic challenges.

She said she had four employees, but is now remaining with one and has since relocated to a cheaper place.

“My capital was eroded during that time as business was slow, but I still had needs to address. I have not been able to access loans from financial institutions as I have no collateral,” she said.

Yohane and Whayo’s firms are among the 80 percent of those that were affected by the Covid-19 pandemic, according to a study by the United Nations Economic Commission for Africa. The firm’s capacity utilisation declined by an average of 40 percent.

 The study titled ‘Impact of Covid-19 and the Russia-Ukraine crisis on micro, small and medium-sized enterprises (MSMEs) in Malawi’ had a sampling frame of 11 466 enterprises.

The study found that in 2020, there was a decline of 18 percent in median revenues among responding businesses followed by a 14 percent recovery uptick in 2021, only to see another decline of 13 percent in 2022.

In an interview on Friday, Chamber for Small and Medium Businesses Association administration manager Grant Chimenya said following the pandemic, most members scaled down while others closed their businesses completely.

He said: “To remedy the situation, we postponed subscription payments so that small businesses should organise themselves. We also expected owners to diversify their operations to suit the current business environment.

Chimenya said they are banking on a United Nations Economic Commission for Africa programme being facilitated at Southern African Development Community to provide training on technology and innovations in business to diversify and grow small businesses.

According to a 2021 Finscope study, the MSME sector employs 24 percent of the countr’s total labour force and contributes 39 percent to the country’s gross domestic product.

A majority of MSMEs are in wholesale and retail trade while two thirds of about 1.6 million MSMEs in Malawi are micro enterprises.n

The post  Covid-19 impact still haunts SMEs first appeared on Nation Online.

The post  Covid-19 impact still haunts SMEs appeared first on Nation Online.