04.May .2021 21:30

Supporting Small Businesses is Critical for COVID-19 Recovery

Supporting Small Businesses is Critical for COVID-19 Recovery
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Micro, small and medium enterprises (MSMEs) can power a stronger recovery from the COVID-19 pandemic, due to their innovative and opportunity-seeking nature, but they need more support.

Policymakers need to adopt policies and institutions to enable small businesses to make a greater contribution to post-pandemic economic revival.
 
Such support should be aligned with the priorities of the post-COVID-19 social and economic recovery, said UNCTAD Acting Secretary-General Isabelle Durant, during the 7th edition of the Empretec Global Summit, UNCTAD article reads. 
 
“Short-term support measures such as relieving tax burdens on MSMEs, extending debt finance and employment support are certainly needed and should be continued,” Durant said.
 
“Yet at the same time, it’s important to invest in long-term structural policies, such as digital and financial inclusion, as well as entrepreneurial skills capacity development,” she added.
 
MSMEs constitute the backbone of the global economy, accounting for two-thirds of employment globally and between 80% and 90% of employment in low-income countries.
 
At the same time, they are disproportionately affected by pandemic-related shocks. They are overrepresented in non-essential services sectors hardest hit by confinement measures. Many MSMEs have suffered huge revenue losses while others have shut down.

MSMEs’ smaller size allows them to be flexible and adapt to new environments such as the one created by COVID-19.

Not only can they help overcome previous constraints related to lack of productive capacities and economic diversification in many low-income countries but also enhance a strong and sustainable recovery.
 
Nigeria’s minister of state for industry, trade and investment, Mariam Katagum, said her country is supporting MSMEs through grants to address their financing needs.
 
“Supporting entrepreneurs and small businesses by creating opportunities for MSMEs to thrive is essential for increasing productivity, creating jobs and boosting our economy,” Katagum said.
 
She said Nigeria recently revised its national policy on MSMEs to strengthen their resilience in the face of the pandemic, adding that more policy frameworks were in the pipeline to support startups in the digital economy.
 
Other high-level panelists related good practices and lessons learned from Angola, Argentina, Brazil, Ghana, Saudi Arabia and Uruguay.