According to the World Bank’s COVID-19 Business Pulse Surveys carried out in partnership with national statistical offices and others, as well as COVID-specific follow-ups to its traditional Enterprise Surveys, firms and workers in every part of the world were affected by the shock of the virus.
Micro, small, and medium enterprises (MSMEs) took a devastating hit from COVID-19 pandemic with more firms in sub-Saharan Africa axing more jobs as sales took a terrific hit, the bank said at the weekend.
The International Labour Organisation (ILO) estimates showed that global labour income has declined nearly 11per cent or $3.5 trillion in the first three quarters of this year.
As a result of income losses, the World Bank estimate that as many as 150 million people could be pushed into extreme poverty by 2021. Without timely assistance and swift policy action, otherwise healthy firms will be shuttered permanently, and people will suffer longer.
The study which targeted MSMEs in developing countries to capture the impact of COVID-19 on firm performance, understand firm adjustment strategies, and policy responses, showed that firms are so far holding onto workers, riding out the downturn, but their finances are deteriorating as their sales have been halved by the crisis.
It also showed that sales fell for about 84per cent of firms in developing countries relative to the same period last year. The average decline was 49per cent and has been strikingly persistent. Four months after the peak of the crisis, sales continue to be over 40per cent lower.
Micro and small firms (less than 20 workers) have been affected disproportionately, experiencing a decline in sales of 50per cent or more, while large firms (100+ workers) saw sales declines of less than 40 per cent.
Tourism-related activities such as accommodation and food preparation have been among the hardest hit and are more likely to remain closed, even six weeks after the peak of the outbreak.
According to the report, broad sector- or size-groupings conceal the wide variation in the impact of the shock, presenting challenges for targeting policy support. For example, in Senegal, six retail firms with 10 employees all surveyed in the same week reported sales declines ranging from 10per cent to 100per cent.
