With the effects of Covid-19 taking a toll on businesses across the globe, those operating in low income countries and specifically those in Africa have sought for more than finance to pull through.
Invest in Africa (IIA), a private sector-led initiative focused on growing local businesses and local content in Sub-Saharan Africa, has created a Covid-19 SME survival toolkit programme that helps SMEs overcome the potential damage to businesses caused by lockdowns and the ensuing economic shock.
The survival toolkit includes practical guides, solutions and recommendations to help African SMEs get through the many challenges the pandemic represents. It is also organizing a series of webinars under which SMEs can benefit from several industry advisors.
The entity has a curated list of online resources relevant to your business during this pandemic.
“Because the vast majority of businesses in Sub-Saharan Africa are SMEs, they also provide nearly all employment opportunities, so ensuring their survival is critical to longer term economic growth prospects,” said William Pollen, IIA’s chief executive officer (CEO).
IIA works with an extensive network of partner organisations, including consultancy Ernst & Young (EY), the IFC and others. Alongside these partners, they have developed courses such as The 100-Day Covid-19 Business Recovery Plan and also courses targeting specific groups such as women-led SMEs.
Pollen adds, “What we are aiming to achieve through this programme is not only to enhance SMEs’ chances of surviving this crisis, but also to help them emerge stronger and more resilient.”
The coronavirus pandemic is causing large-scale loss of life and severe human suffering globally. It is the largest public health crisis in living memory, which has also generated a major economic crisis, with a halt in production in affected countries, a collapse in consumption and confidence, and stock exchanges responding negatively to heightened uncertainties.
Economic forecasts issued over April-June 2020 depict an increasingly negative outlook in terms of the scale of the global economic recession triggered by the pandemic. In its June 2020 Economic Outlook, the OECD projected a 6% drop in global GDP, and a 7.6% fall in case of a second pandemic wave by end 2020, with a double digit decline in some of the most hit countries, followed by a modest recovery of 2.8% in 2021.
On the supply side, SMEs have been experiencing a reduction in the supply of labour, as workers are unwell or need to look after children or other dependents while schools are closed and movements of people are restricted.
On the demand side, a dramatic and sudden loss of demand and revenue for SMEs severely affects their ability to function, or causes severe liquidity shortages. Furthermore, consumers experience loss of income, fear of contagion and heightened uncertainty, which in turn reduces spending and consumption.
IIA is also partnering with the MasterCard Foundation, to launch a programme that will support more than 8,000 micro, small and medium-sized enterprises (MSMEs) in Eastern and Western Africa to navigate commercial challenges created by the pandemic. The Business Advisory and Support Programme, with a commitment of US$1.69 million from the Mastercard Foundation COVID-19 Recovery and Resilience Program, aims to restore local economies by creating more sustainable businesses and generating work opportunities for Africa’s young people.
The programme will support businesses and young entrepreneurs to build immediate and long-term resilience through online learning resources; provide guidance on accessing markets and finance; and foster greater inclusion of young people, particularly young women.
The programme consists of two components and will run until June 2022. The first is a virtual training programme, an expansion of IIA’s ‘COVID-19 SME Survival Toolkit’, which will enable an additional 8,870 MSMEs in Ghana, Kenya, and Senegal to access online masterclasses, peer-to-peer sessions, and a repository of practical guides.