COVID 19: Social Safety Nets Critical for SMEs Survival

Lusaka, Monday, April, 6, 2020: In the wake of the Corona Virus pandemic whose socioeconomic ramifications are still unfolding, Micro, Small and Medium Enterprises (MSMEs) are taking the greatest hit, threatening their survival. To save this critical sector, COMESA gender and social affairs expert is proposing to governments, to consider introducing national social safety net policies.

Mrs Beatrice Hamusonde, Director of Gender and Social Affairs, observes that as governments enforce public health preventive and mitigation measures, it is paramount to also consider policy measures that address the economic and social aspect of the lockdowns especially on the MSMEs.

“Though the Corona virus pandemic affects all groups of the population, its socio-economic effect is detrimental among micro and small-scale businesses including small scale cross borders traders of whom the majority are women,” she said in a statement issued in Lusaka.

Currently, several COMESA Member States have placed stringent limitations on the movement of people in compliance with the recommendations by the World Health Organisation (WHO), to stop further spread of the COVID 19. This has affected trade in goods and services especially for MSMEs.

“In the formal institutions, work from home has been introduced and it seems going well in different organizations including government offices,” the Director said.  “Applying the same measure for self-employed citizens will obviously present difficulties in many ways to micro and small-scale businesses.”

Noting that regional some governments have already acted and mobilized resources to provide direct support to disadvantaged families, Mrs. Hamusonde called for enhanced partnerships with the private sector to reduce the burden of the outbreak on limited public resources.

Further, she noted, it is also timely for Member States to prioritize the analysis of the resilience index and vulnerability scale of the informal economy.

In Africa especially in Sub Sahara Africa, more than 75% of the population’s source of livelihood comes from micro and small informal businesses including Small Scale Cross Border Traders. This sector is mainly dominated by women and young people. These informal businesses mostly generate meager daily incomes that are the sole source of livelihoods for many families in semi urban and low-income communities.

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