BY OLUSHOLA BELLO, Lagos
IFC, a member of the World Bank Group, has said, over 90 per cent of MSMEs across sub-Saharan Africa are suffering harsh economic impacts due to the COVID-19 pandemic.
The institute, in its report titled, ‘COVID-19 and Women-Led MSMEs in sub-Saharan Africa’ stated that “Women-led MSMEs have been especially hard hit, with many reporting revenue losses of over 50 per cent, largely due to their smaller size, informality, and concentration in heavily affected sectors.”
It noted that “Women-led MSMEs entered the pandemic with lower rates of financial inclusion than male-led MSMEs, and the pandemic exacerbated these trends. Among the 13 per cent of MSMEs that accessed financial support during the crisis, fewer were women-led MSMEs.”
Despite challenges posed by the pandemic, the report said: “Over 90 per cent of MSMEs still plan to maintain or expand their businesses over the next six to 18 months. In line with this goal, over 80 per cent of MSMEs expressed the need for support, particularly for growth capital and expansion assistance, during the recovery.”
According regional industry director, Middle East and Africa, IFC, Manuel Reyes-Retana, in emerging economies, small businesses, especially those owned or led by women are critical to growth, employment, and development. In Sub-Saharan Africa, small and medium enterprises account for up to 90 percent of all businesses.
“These businesses face financial and operational difficulties in good economic times, and the COVID-19 crisis has only amplified the challenges they must contend with on a daily basis; access to finance, the lifeblood of any growing enterprise was a serious challenge for many of these businesses before the global crisis.
“Today, new pandemic-related restrictions on financing pose even greater hurdles to the operations and financial sustainability of small businesses, and in many cases are a threat to their very existence.”
Reyes-Retana added that, “the pandemic also has the potential to widen existing gender inequalities in economic opportunities across Africa, especially among small businesses. The constraints and barriers that women entrepreneurs face, including but not limited to access to finance, are being exacerbated by the COVID-19 crisis.”