Business Survey reveals adverse effects of COVID-19 on businesses in Zambia

July 21, 2020

UNDP, Resident Representative, Lionel Laurens with Hon. Minister of Commerce, Trade and Industry, Christopher Yaluma

The Ministry of Commerce, Trade and Industry on 3rd July 2020 launched the report of the Business Survey, undertaken with the support from the United Nations Development Programme (UNDP), to assess the impact of the Covid-19 pandemic on various businesses in Zambia.

The results of the survey show that Covid-19 had a major impact on businesses in Zambia.

Seventy-one percent (71%) of the respondents indicated that their businesses were partially closed while fourteen percent were totally closed. Only fifteen percent reported to have maintained normal operations. The Education, Transport and Catering and Accommodation Sectors have been particularly impacted by Covid-19 while other sectors were almost not affected. Eighty-five percent (85%) businesses working in education reported to be completely closed, while sixty percent (60%) of businesses in the human health and social work sector maintained normal operations.

The report also proposes recommendations on relevant policies and provides baselines for the government, development and cooperating partners to design projects and policies to assist and support impacted businesses by the Covid-19 outbreak. The policy recommendations highlighted in this report are based on real-time evidence, gathered from the online survey conducted in May 2020, covering 706 large, medium, small and micro enterprises as well as a thorough review of reports and research literature published by different organizations on the impact of the pandemic. The report also shows that loss of customers is the most significant challenge rated by 77.3% of the respondents. Other reported challenges include supply chain cuts at 37.7%, high commodity prices/material prices reported at 36.0 % and problems with late payments at 32.3%, among others. These challenges are expected to affect operating revenue for enterprises.

The Survey revealed that the majority of enterprises are committed to continue operations by adhering to the new normal requirements to do businesses alongside Covid-19 threats. Enterprises have further resolved to adopt new development strategies by embracing and exploring new business models, accelerating technological, product and services innovation, and strengthening global reach of supply chain and expansion of overseas market.  However, 7% of the total responding enterprises reported to have failed to cope with the epidemic and expressed their intention to withdraw from the market.

Against this backdrop, Honorable Minister of Commerce, Trade and Industry, Christopher Yaluma said that quantifying the real impact of the Covid-19  was difficult, due to the rapidly evolving nature of the pandemic, but noted that the survey focused on understanding the possible socio-economic repercussions in order to propose policy recommendations aimed at mitigating the impact on the economy. He added that: “It is my expectation that the report has generated sufficient information indicating the areas that need improvement in terms of policy interventions for private sector development. In view of the foregoing, it is in the best interest of both government and private sector to note the findings of the study. I am confident that the Survey Results will give a clear indication of how business enterprises have been affected in Zambia and provide comprehensive policy actions aimed at mitigating the impact of the disease on the economy”.

Speaking at the launch of the report, UNDP Resident Representative, Lionel Laurens, said that the pandemic has had a huge impact on the economy, which requires moving together to assist the private sector to get through this difficult period.

Mr. Laurens said that: “Development Partners, including the United Nations are ready to assist Government to take on the longer-term challenge of transitioning to a more sustainable economy and working with its key partners support the co-design of a green stimulus package to address the economic crisis (growing inequalities) and the climate crisis. This work would fall into 4 areas: (1) Impact investment for the transition to a green economy; (2) Green businesses and green jobs through local economic development, urban planning, sustainable homes, sustainable procurement, and innovation; (3) Nature-based solutions and green infrastructure; (4)  Social protection system that adequately protect vulnerable workers in the labour market...”

The support to the Rapid Covid-19 Business Survey is part of the broader support being provided by the UN system in Zambia to the Government of Zambia to assess the socio-economic effects of the Covid-19 pandemic in Zambia. It aims to anticipate and propose measures to manage and mitigate its consequences in the short, medium and long term chiefly to safeguard the country’s sustainable growth path and achievements within the national development objectives enshrined in the 7NDP and the Vision 2030. 

To access Business Survey Report - the impact of COVID-19 on enterprises in Zambia