Most entrepreneurs who took part in AMI’s COVID- 19 business survival boot camps, with say a single, small loan could mean survival. A staggering 87 per cent of small businesses in Africa fear they may not survive the COVID- 19 crisis, a recent survey of entrepreneurs by training consultancy the African Management Institute (AMI) shows.
The global health scourge has halted economic activities in many parts of the world, with governments imposing lockdowns to curb infections. Already, millions of jobs have been lost worldwide with tourism, travel and hospitality sectors, the key drivers of the continent’s economy, hardest hit.
Latest figures from the World Travel & Tourism Council (WTTC), the global industry association, show that the sector is losing a million jobs a day across the world. In Africa alone, 7.6 million jobs are expected to be lost, while total GDP loss could be close to $53 billion (about R980.5 billion) Overall, the UN predicts that nearly half of all jobs in Africa could be lost due to the coronavirus outbreak. Of the entrepreneurs who participated in AMI’s COVID-19 business survival boot camps, 87 per cent said they were worried about surviving the current crisis, while 67 per cent said their businesses have been hit hard since the introduction of social-distancing, lockdowns, and curfews on the continent.
The two-week virtual boot camp was held in partnership with Business Day for the SA leg. Almost 2,500 businesses from over 40 countries across Africa have registered for the boot camps. Participants come from 44 countries, but are concentrated in Kenya, Nigeria, SA, Rwanda, Tanzania, Uganda, and Ghana. In response to the survey 62 per cent of small and medium enterprises (SME) owners also said that COVID-19 has had a big impact on customer demand, while 49 per cent said their product supply has been highly affected. In focus groups, businesses have indicated that they need help to forecast cash flow, plan for different scenarios, understand how to keep connected to their customers, manage costs and determine how to support their team at this time.
The survey shows that Africa’s small businesses urgently need liquidity. Over 75 per cent of entrepreneurs surveyed believe a loan would help their chances of survival and just more than 50 per cent indicated that small loans of less than $50,000 (about R725,000) could be the difference between survival and closing down.