COVID-19’s Impact on Micro, Small and Medium-Sized Enterprises (MSMEs)

Deah James, Guest Contributor

The World Health Organization (WHO) classified the COVID-19 outbreak as a global pandemic in March 2020. To date, there have been over 8 million persons infected and over 400, 000 deaths worldwide as a result of the virus. Despite it being a health crisis, COVID-19 has not only taken a toll on the persons it has infected but on businesses and economies on a whole.

In St. Vincent and the Grenadines, the effects of the virus have been no different. Most of our businesses can be categorized as micro, small and medium enterprises. And it is these businesses that are said to have been hit the hardest by the fallout from the pandemic.

Even though they can be agile in response to the changing world, MSMEs are also susceptible to shocks such as COVID-19. This is because these businesses are vulnerable by nature. Access to finance is a primary obstacle.   

According to the World Trade Organization (WTO), many of these enterprises depend on international trade. This is because they either export their products through direct or indirect channels or because they import the inputs needed to manufacturer their products to sell on the local markets.

These types of businesses also account for a large portion of the employment in a country and are a major employer of women and youth.

With the disruptions in the supply chain caused by unprecedented lockdown measures enacted to contain the spread of COVID-19, MSMEs are finding it increasingly difficult to find new suppliers, deal with price increases that have occurred and also the massive drop in demand for products in most sectors.

To help business owners, governments have created stimulus packages with the focus on assisting with the effects of COVID 19. One such initiative by the Government of St. Vincent and the Grenadines is the expansion of the existing Promoting Youth Micro-enterprises (PRYME) programme. In addition support for business include loan forbearance, utility bill moratorium, VAT and Tax waivers and extension on filing income tax returns and for payment of motor vehicle licenses and liquor licenses.

To show the value placed on Micro, Small and Medium Enterprises, the United Nations in April of 2017 adopted resolution 71/279 which designated June 27 as Micro, Small and Medium- sized Enterprises Day. This was done to raise public awareness of their contribution to sustainable development and global economy.

For this year’s celebrations, the International Trade Centre (ITC) will host a WebTV programme on Wednesday June 24th entitled COVID-19: The great lockdown and its impact on Small business.

Deah James, B.Sc., M.Sc., is an international trade and development professional with keen interest and experience in the areas of trade facilitation, sustainable development, regional integration, aid for trade and financing for development.    

Photo credit: Pixabay