The Effect of COVID -19 on Micro, Small and Medium Enterprises’ Operation in Ethiopia

Abstract

A novel Corona virus pandemic caused a major disruption on the political, economic, social,
religious and financial activities of the world population. In developing counties like Ethiopia,
the pandemic led to a massive damage on economic activities in general and MSME’s in
particular following restriction on human mobility by the government and stay-at-home advice.
This study is intended to assess the effect of COVID-19 on MSME’s operation in Ethiopia. The
rapid assessment findings show that the spread of the virus has adversely affected both the
supply and demand side of MSME’s operation. Specific consequences include raw material
supply was stopped, shortage of workers happened, shortage of working capital created, their
operational cost increased, and consumers consumption declined. As a result, MSME’s
contribution to national GDP, creation of employment opportunity, and other benefits are being
hampered. Therefore, the study recommends that MSME’s should take actions like shifting their
operation to related businesses and production of currently demanded protective materials.
Government and other stakeholders should also provide technical as well as financial support
for MSME’s in Ethiopia in order to ensure their survival.