SMMEs Most Hard Hit by Covid-19
-209 SMMEs in debt -729 jobs are at risk
The Local Enterprise Authority (LEA) has released findings of a report they conducted in March 2020 to assess the impact of Covid-19 on Small Medium Micro Enterprises (SMMEs). The report indicates that LEA assessed 382 enterprises, 63 percent of which have not been in operation since the lockdown started. According to the report, this translates to 47 percent average reduction in monthly revenue. It further explains that the 382 enterprises employ at least 2669 people and have a wage bill of over P5.9 million.
The report states that the tourism sector, which accounts for 27 percent of the employed, registered a 72 percent loss in revenue since it was one of the first to be heavily affected when countries introduced travel bans. According to the report, this move on its own has put at least 729 jobs at risk but there will be efforts put in place to avoid this move alongside government efforts.
LEA says 142 enterprises remained operational but were faced with a lot of operational problems since the economy in general has also been under attack. Of the problems that arise, LEA notes that inability to pay fixed salaries, rental, importing raw material and accumulating revenue close to amounts they did before the pandemic were major ones.
It says of the 382 surveyed businesses, 209 had loans of over P130 million. Three hundred (300) have been assisted with applications for the Botswana Unified Revenue Services (BURS) wage subsidy, which helped avert job losses, especially in the tourism sector that owes 61 percent on the mentioned figure in loans. According to the survey, a further 19 of these were assisted to apply for working capital and loan payment holidays at the Citizen Entrepreneurship Development Agency (CEDA) and the commercial banks.
Of these loans, CEDA is the most indebted as it accounts for 56 percent of them, commercial banks for 35 percent, the National Development Bank (NDB) for 5 percent and Botswana Building Society (BBS) and Youth Development Fund (YDF) for 2 percent each.
The study states that LEA tried to bring in place measures to facilitate for ease of doing business by these operational enterprises. The aid included acquiring permits for on duty staff and facilitating for raw materials, especially for the production of health and hygiene materials which are in demand in this period.