A year well into the coronavirus pandemic and it is clear life will never be the same for some time, the resilience of economies big and small has been tested to the limit, but also challenged resource allocation priorities of many countries.
In Rwanda, the pandemic has dealt a devastating blow to micro, small and medium businesses, while women-owned businesses also took a massive hit as the virus ravaged different sectors of the economy.
Although some businesses tried to weather the storm of the first lockdown and survived it, many small medium businesses across sectors such as transport, hospitality, manufacturing, tourism, trade among others did not survive the second lockdown that started in January.
As revenues dried it became increasingly difficult to continue operations since it meant these businesses spending money from elsewhere so they can stay open, which proved untenable hence the decision to close.
As businesses took a hit last year, government came up with the economic recovery fund, a special purpose vehicle to give stimulus support to distressed businesses in selected sectors like tourism.
Prudent and responsible as the fund idea was, it only met needs of the big businesses and left the small and medium enterprises out in the cold, even a window through which these businesses could funding support was not exploited because banks charged with disbursing this money came up with stringent requirements which proved hard for smaller businesses to meet.
A year into the pandemic, government and its partner agencies ought to go back to the drawing board and do a forensic study on the situation with the small and medium businesses, and tailor a sector by sector approach through which businesses can be salvaged.
Government also ought to come up with sound fiscal stimulus programs, for instance giving tax holidays to these distressed businesses in certain sectors like tourism, hotels, transport among others.
Continuing to milk these businesses through taxes yet there no revenues coming in, will just further tie them in distress which might force even those still trying to remain standing to cave in. Countries like Morocco have given businesses in key sectors like tourism up to two years tax holidays, to be able to recover from the pandemic setback, such proactive, economy rehabilitating approaches should be emulated by countries like Rwanda.
The size of investments small and medium businesses have put in, capital both human and financial will all be put to waste if many close shop, and it will almost be impossible for many of them to get back where they were even if conditions normalise, so the fight should be to keep them open.
Some of these smaller businesses could be closing in silence but the effects of their closures will puncture the economy and effects will be felt for a long time, and will be spread cross a number of development indices.
The micro, small and medium businesses are the ones anchoring certain key sectors that drive the economy, for instance the service sector, their closures will mean loss of jobs to many people.