COVID-19 and SMEs In Zambia 15 December 2021

By Isaac Tembo
15th December 2021
As of March 18th, 2020, Zambia recorded its first two cases of COVID-19 and the cases have since been increasing cumulatively making the Government of the Republic Zambia to implement stringent measures to curb further spread of the virus. These measures have affected a number of small business including those ran by women and youths.
According to shah (2012), about 90% of the workforce in Zambia is estimated to work in the informal sector, with the majority in subsistence agriculture. In addition, according to the Inter-Governmental Conference (IGC) census of firms in Lusaka – Zambia’s capital – found that 52% of Lusaka’s 47,428 firms are informal which are said to be SMEs. This is only counting businesses with a fixed location and excluding traders who operate from make-shift stalls or no stalls at all. Yet, informality is one of the biggest challenges that compound the response to the COVID-19 pandemic. For the majority (90%) of Zambians working in the informal sector, most of their income is earned on a daily basis. This makes stay-at-home orders and lockdowns difficult to comply with. IGC firm census further reports that these businesses largely fall into the categories of retailing, the accommodation and food industries, as well as other services (the vast majority are hairdressers): all client-facing enterprises.
Although there has been growth in the economy, since the decrease in the COVID-19 related cases (September – October), some measures taken to curb the spread of COVID-19 including among others; closure of some businesses such as restaurants and bars, social distancing, school closures and restrictions on travel, including into and within the country in affected areas, has affected a number of businesses which are mostly run by women and the youth.
In worst cases these businesses have led to permanent closers, attracting an increase in poverty levels which is estimated at 60% household poverty (most of the people below this poverty line are women). The onus lies on the government and other stake holders including national and international civil societies, to come up with lasting measure to minimize the adverse effects of COVID-19 in poverty stricken areas and protect the vulnerable from both social and economic effects of the pandemic.
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