Banjul, 28 June 2022 (TDI): June 27 marked the global Micro Small and Medium-Sized Enterprises (MSMEs) Day. According to the UN office in The Gambia, MSMEs have an essential influence on the achievements of Sustainable Development Goals (SDGs). Among 17 SDGs, the 8th one which refers to “decent work and economic growth” has the most direct link with MSMEs.
On this special day, the UN office in The Gambia called for support for MSMEs. The office especially emphasized the significance of increasing investment in such enterprises.
Without investment, it’s hard for them to survive, grow and contribute to society in the context of COVID-19.
Micro Small and Medium-Sized Enterprises in The Gambia
According to The Gambia National Policy for MSMEs (2019- 2024) published by UNESCO, there are six main challenges to the Business Environment in The Gambia. They conclude the lack of access to finance/capital/credit, unsuitable taxation, and low access to electricity. Moreover, the absence of land policy, the infrastructure of poor quality, and inefficient registration systems are also problems.
Although currently there are still remaining challenges to further development of MSMEs, the UN agency and the Gambia Government have been making progress. On 14 December 2020, a year after the outbreak of COVID-19, a High-Level Policy Forum on MSMEs was held. UNDP and the Ministry of Trade, Regional Integration, Industry, and Employment (MOTIE) of the Gambia jointly organized the forum.
The forum aimed to review the priority challenges facing the MSMEs in The Gambia. Furthermore, the forum especially discussed how to develop a roadmap to improve their growth and productivity.
The impact of COVID-19:
The economic impact of the COVID-19 crisis differs across regions and sectors, including MSMEs. According to the World Trade Organization (WTO), today, 95% of companies across the globe are MSMEs, accounting for 60% of the world’s total employment. They contribute around 35% of GDP in developing countries. However, they have been facing severe challenges due to the pandemic.
The challenges that badly affected them around the world can be classified into two categories. One is related to the self-characteristics of MSMEs themselves.
Firstly, MSMEs are concentrated in the industries hardest hit by the epidemic including the service sector, tourism sector, transportation sector, and so on.
Secondly, they are relatively vulnerable, with fewer cash reserves and limited financing channels.
Thirdly, they are more vulnerable to the negative impact caused by the fluctuations and disruptions of the global supply chain due to their limited inventory scale, small supplier network, and weak bargaining power.
And lastly, MSMEs are also facing challenges on human resources caused by lockdown policies.
Another perspective is focusing on external factors. Initially, MSMEs were hit by both supply and demand, and liquidity shortage has become the main problem. On the supply side, there are shortages of means of production and intermediate goods.
In terms of demand, domestic market demand has contracted significantly. Import and export trade has been restricted, and overseas product demand has been dropping sharply.
Also, the pandemic-oriented policies have made it difficult for MSMEs to operate normally, which has hit business confidence.
