Economic impact of COVID-19 on Ethiopian micro, small, and medium enterprises and policy measures

Abstract

The aim of this study is to determine the impact of MSME's affected by the Covid-19 pandemic. We used a panel data design and collected data from 650 respondents randomly from various parts of the country. The data is collected in three rounds: the first from June-July 2020, the second from November-December 2020, and the third from June-July 2021. The analysis found that in (Round 1) 91 percent MSME’s reported decline in production or sale, while in (Round 2) and (Round 3) enterprises reported improvement in production and sale. The study results shows that about 64 percent respondents in average of the three rounds reported increased in debt. Similarly, an average of three rounds, 16 percent and 12.5 percent workers were permanently and temporarily lay-off. Based on the findings of the study its being suggested that short-term and long-term policies should be established for reviving MSME’s.