05/12/2021 | Press release | Distributed by Public on 05/12/2021 21:17
KHARTOUM, May 12, 2021 - When the COVID-19 (coronavirus) pandemic began, businessownerOmer Abdelaziz had no clear idea about the duration of the government's imposed lockdown. As co-owner and director of the International Development Center for Training and Capacity Building, he simply complied fully with the government's decision, suspending all activities.
But the pandemic and the country's restrictions went on longer than expected.
'As a management team, we made a mistake in our forecasts about how long the crisis will last,' said Abdelaziz, co-owner and Director of the International Development Center for Training and Capacity Building. 'We decided still to keep the center and not to close it permanently, bearing its high running cost without having any cash inflows.'
In the face of the pandemic, Sudanese authorities acted quickly to slow the spreading virus. Since March 2020, Sudan, much like the rest of the world, has been experiencing the unprecedented social and economic impact of the COVID-19 pandemic. To better assess the impact of COVID-19 on enterprises such as Abdelaziz's, the World Bank and the Central Bureau of Statistics (CBS) jointly carried out the first of its kind survey in the country - the Sudan High Frequency Survey on COVID-19, using mobile phones.
'The survey aims to inform policy making and government responses to contain the impact of the pandemic to its lower possible level,' said Ali Abbas, Director General, the Central Bureau of Statistics.
The ongoing panel survey provides a snapshot of the impact of the pandemic on Sudan's businesses will be conducted in six rounds, with the aim of monitoring the COVID-19 crisis and assessing the dynamics of its effects over time.
'The rapid spread of COVID-19 and the government's containment measures have significant negative impact on the Sudanese population and economy,' said Alvin Etang Ndip, Senior Economist and Task Team Lead for the survey. 'Having empirical evidence that quantifies the extent of the impact on welfare is important for informing policy response and recovery efforts. The results from the early rounds of the High Frequency Survey would also be useful for strengthening awareness campaigns on preventive measures to minimize the spread of the virus, particularly as we enter the second wave of the outbreak.'
Specifically, the survey monitors the impact of coronavirus on the operation of nearly 500 enterprises, representing the three districts of Khartoum State (Khartoum, Bahri, and Omdurman) starting in August 2020. The findings, highlighted in the Effects of COVID-19 on Sudanese Enterprises policy note, revealed both the losses and financial fragility of medium, small and micro enterprises.
Of the surveyed enterprises, 29% had to close during the partial lockdown (8% permanently and 21% temporarily). Small enterprises (5-19 employees) were the most affected by the partial lockdown with nearly half of them going out of business.
These enterprises did not have any savings or cash on hand to meet their regular expenses, which explains why layoffs were so prevalent. In contrast, around one-third of medium (20-99 employees) and large (100 and more employees) enterprises closed. Only one-quarter of the micro firms (0-4 employees) had to close (Figure 1).
Figure 1: Disruption to the Operation by Enterprise Size
The survey also found that the sectors with the highest level of closures during the lockdown were manufacturing and other services (about 50%). The impact on sales and employment was revealed, as 81% of the enterprises that were open reported an average of 54% decrease in sales compared to the same month the previous year.
Enterprises in manufacturing (83%) and other services (81%) were largely affected, according to the survey results. Jobs and economic activities have sharply declined for most employers and employees, and a decay in incomes has been observed, consequently, about 7% of the enterprises reported that they reduced wages for an average of 6 percent of the workforce while 8% of the enterprises indicated that they had laid off workers, particularly because none of the enterprises received any government support.
The results signified key financial problems perceived by enterprises as top obstacles to their operation included meeting staff wages and social security charges, paying rent and invoices, repaying loans, and accessing banking services (Figure 2).
Figure 2: Most Significant Financial Problems for the Enterprise During COVID-19 Outbreak
The survey results provided an exclusive depiction into business decisions and expectations at that time, while offering insight for designing the veracious policies to aid the recovery through reforming the governance system and legislations of enterprises to improve liquidity, give tax breaks, and financial support. Representatives from line government institutions affirmed their solid commitment to follow- up with policy decisions to protect the sector based on the results of the survey.