In commemoration of 2020 World Micro-, Small and Medium-sized Enterprises (MSMEs) Day, the All Africa Association for Small and Medium Enterprises (AAASME), Saturday hosted a webinar discussion on this year’s commemoration theme: “COVID-19: The Great Lockdown and its impact on Small Business.”
Inaugurated March 2018, AAASME is a continental advocacy body working to support the development of Micro-, Small and Medium Enterprises (MSME) ecosystem in Africa.
In his keynote address at the webinar, Prof Atef El Shabrawi, Egyptian SMEs and innovation expert, said over 2.7 billion people representing 81% of the world’s total workforce had been affected by the lockdown measures imposed by various national and subnational governments around the world, with the travel, tourism and hospitality industries being worst hit by the pandemic, according to statistics by the International Labour Organisation (ILO).
El Shabrawi said sectors requiring human contact such as hotels, recreation centers and restaurants were most affected by the pandemic; consequently, over 120 million jobs across the travel, tourism and hospitality industries were at risk of being lost to the pandemic. He added that 60-80% of international tourism had been affected by the travel bans imposed by countries with an estimated total loss of 1.27 trillion USDs to countries of the world including Africa’s top tourism destinations like Egypt, Morocco, and South Africa.
He stated that over 50% of the global workforce were working in informal sector and therefore lacked fixed contracts or any form of insurance cover, noting that for small businesses to survive and flourish during the pandemic, they had to rebuild their ecosystems; rethink their financing models as well as leveraging opportunities presented by COVID-19, through adoption of new value propositions to changing customer needs and behaviours such as customers’ migration to online platforms occasioned by the need for social distancing.
In his address, AAASME’s secretary-general, Jasper Eradiri, said being the backbone of the private sector, African small businesses must begin to think of strategies for surviving and coping with the pandemic, by leveraging disruptive innovations and opportunities provided by the digital economy. “I am of the opinion that SMEs should begin to move towards innovation-driven enterprises (IDEs). You can’t continue to do the same thing when times have changed. If you are an SME and you are not innovative, it might be difficult for you to survive,” he said.
The UN says small businesses were being hit hardest by the economic fall-out of the COVID-19 pandemic, noting that the unprecedented lockdown measures enacted by governments, in a bid to contain the spread of the coronavirus, had resulted in supply chain disruptions and a massive drop in demand across most sectors. “To continue playing their crucial role in creating decent jobs and improving livelihoods, small businesses depend more than ever on an enabling business environment, including support for access to finance, information, and markets,” says the UN.
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