In mid-May, 57% of workers reported that their employers had to temporarily lay them off due to the wider economic decline caused by the coronavirus pandemic, according to a survey conducted by the Research and Planning Division of the Ministry of Finance.
Their findings captured the impacts of COVID-19 on businesses since Sierra Leone records its index case on March 31st to July 2020.
The survey indicated that the restrictions instituted by government saw 11% of employers experience delay on their wages and the daily working hoursdecline to 4 – 6 hours during May when compared to 8 hours in March. Business hours also fall from 10 hours in March to 6-8 hours in May.
According to the findings of the Finance Ministry the weekly income of businesses lowered in mid-May to 68% as reported by business owners and in May businesses experienced 60% dropped of average weekly profits. About 50% of businesses surveyed were opened in April with significant increase by the end of May, and around 90% of businesses reported that they were open for service.
It also indicated that 45% of businesses reported lowerdemandfor their products at the start of May with an increase at around 80% by the month’s ending. During the first week of May around 50% of businesses reported that they were having difficultiesin accessing suppliers, but this rose to 60-70% in the following weeks.
The report also highlighted that, a higher proportion of businesses in ruralareasexperienced difficulty accessing customers and suppliers than in Freetown, citing that some businesses reported that they were unable to transport products to Freetown and the Port for export or can do so only with long delays.
The survey captured that 13% ofbusinessemployeesreported a dropintheirincomecomparedtoMarch2020. Theaverageweeklyincomeofworkers droppedby25% inMaycomparedtoMarchLe260,000 to 200,000althoughbyearlyJunehalfofthisdrophadbeen recovered.
They found that the majority (83%) of businesses believe they would survive this crisis. However, another survey in early April found that just over 50% of businesses said they could survive for less than 3-months without any external support and a further 30% said they could survive from 6 months to up to 16.
The researchers indicate that despite the reopening of most businesses in recent weeks, incomes for business owners and wages of employees are significantly lower than before the crisis, and the outlook remains uncertain.
Knowledge of Government support schemes for businesses has increased. However, access to the current active interventions remains a challenge as most SMEs do not meet the criteria needed to qualify for support. Support in the form of grants and small loans are the most requested by businesses to address their key challenges related to cash flow and a lack of access to finance.
The findings presented are based on several surveys conducted in recent months by the International Growth Centre, Small Medium Enterprise (SME) Forum and Invest Salone. Subsequently, it included detailed findings from the Business Pulse Survey and Statistics Sierra Leone’s COVID-19 Survey, currently being conducted.
To cushion the impact of COVID-19 on businesses the Government of Sierra Leone has prepared the Quick Action Economic Response Programme (QAERP) to maintain macroeconomic and financial stability as well as mitigate the impact of the disease on households and businesses.
By George M.O. Williams
13/10/2020. ISSUE NO: 7929