Ghanaian MSME Resilience In the face of COVID-19

MSMEs are one of the most important, yet vulnerable, drivers of development in sub-Saharan Africa (SSA). This stems from the fact that, while micro-, small and medium-sized enterprises (MSMEs) are known to support over 50% of all livelihoods on the continent (both formal and informal), these firms often face a plethora of heterogenous risks that regularly put their survival and continuous operations in jeopardy. These risks can range from those faced uniquely at a firm level (such as credit, crime and infrastructural risks) to those endured at a much larger, systemic scale (such as climate disasters or the ongoing COVID-19 pandemic). To avoid succumbing to these risks and sustainably contributing towards inclusive economic development, the resilience of firms is key.

The shockwaves from COVID-19 on business resilience has been unprecedented. In SSA, and across the globe, the COVID-19 pandemic has produced one of the largest systemic shocks to businesses and economic systems in recent history. Due to national efforts to curtail the virus in 2020, over 90% of MSMEs in SSA experienced significant profit losses due to reduced sales, value chain disruption and indebtedness, among many other risks. Economic players similarly struggled to cope amid highly constrained internal resources, growing debt and poorly digitised systems that left them ill-equipped to effectively support those impacted by COVID-19. The widespread impacts of the pandemic illustrated that, while the ability of firms to mitigate, manage and withstand risks is crucial to their longevity and adaptability to shocks, this resilience is also intricately linked to the fortitude of economic systems themselves.