Pandemic still wreaking havoc on businesses
The devastating Covid-19 pandemic has caused disruptions to most economic activities in Namibia. However, the actual overall impact of the pandemic on the economy remains unknown until such time that critical variables can be identified, including the duration of the pandemic and measures implemented to fight it.
A second-round survey on the pandemic’s effect on businesses was recently conducted by the Namibia Statistics Agency (NSA). The survey revealed that 87.9% of businesses that responded are adversely affected by the coronavirus pandemic compared to the 96.5% reported in May 2020.
But the impact is anticipated to pick again with 92% of business expecting to be affected in the coming months.
According to the survey, the majority of businesses, 61.6%, cited they were currently being affected by the reduction in local demand .“Similarly ,71.8% of the businesses indicated reduced local demand as the most effect they oversee in the coming months if the status of Covid-19 pandemic continues to be persistent,” the survey report reads.
In addition, reduction in international demand was highlighted as the second most current effect experienced by the businesses with 44.3% while 45.9% of the businesses identified it as a prospect future effect. Furthermore, staff shortages were also identified as a possible future effect by 39% of the responding businesses.
A total of 308, representing 85.1% of responding businesses, indicated that they have lost revenue due to the state of emergency measures. Only 10 businesses indicated they did not lose any revenue due to these measures.
Most of the businesses (99) reported to have lost turnover in the range of 91-100%, followed by those who lost between 31-40% of revenue experienced by 32 businesses. Similarly, 29 businesses indicated losing revenue in the range of 4150%, while the least number of companies (15) indicated losing revenues in the range of 61-70%.
The survey results also showed that only 23.7% of businesses received Government support while the majority of 76.3% did not get any government support whatsoever.
Government assistance was mainly through the vocational education and training levy (12.3%) and subsidy on the compensation of employees (7.5%). The survey further indicated that 67.6% of businesses affected by the coronavirus did not receive any Government assistance.
From a total of 358 businesses, 108 businesses (30.2%) reported to have laid off employees due to the state of emergency measures imposed to curb the spread of the virus. About 22.2% of businesses laid-off workers in the range 1-10% of the workforce and 9.3% of companies retrenched employees in the range of 91100% of the workforce.
The second round of the survey indicated that almost half of the businesses (48%) continued to trade partially as compared to 50% that operated partially during the first round of the survey.
This was followed by 31% of businesses that indicated they continued to trade at full capacity, which is an increase when compared to 21.2% of businesses that cited to be operating at full capacity during the first round of the survey.
Speaking to New Era newspaper in Tsumkwe, Uerijandja Tjirongo, a young entrepreneur who owns a barbershop and home shop, said the pandemic affected small and big businesses. According to Tjirongo, the decrease in demand was quite significant and he emphasised that lack of development in small towns is also contributing to the downfall of all business activities.