A new report by the World Bank – has found that Zimbabwe’s small business sector has experienced remarkable disruptions to demand and supply, sales, employment of women and as expected financial impacts to firms.
According to the World Bank report, the pandemic caused multiple shocks to businesses in Zimbabwe.
It outlined some of the key COVID-19 disruptions:
“Close to 90% of formal businesses suspended operations (more than twice the figure in Zambia).
“Suspension was for about 7 weeks on average. Impact is largest among micro and small firms, in Harare, in the textiles sector, and among exporters.
“Most firms (86%) experienced a drop in demand, and disruptions to supply of input, raw material and merchandize for resale (76%). Large firms and those in the food sector seem to be impacted less.”
And beyond disruptions at an operational level, Zimbabwean firms also took a financial hit.
For instance, the report showed that for an average firm, sales in May/June contracted by 51% compared to the levels in 2019.
“The magnitude of the damage is further visible from the financial woes facing the business, where about 90% have reported having liquidity and cash flow shortages.
“As a sign of potential ripple effect, about 64% of the firms had to delay payment to service providers and tax authority,” reads the report.
The Bretton Woods institution said business owners and top managers of 600 firms in Zimbabwe who were interviewed between July 2016 and February 2017 as part of the standard ES were re-interviewed from mid-June to mid-July 2020 to track how much affected they have been by the pandemic.