Impacts of Corona Virus Disease on Employment among Small and Medium Enterprises in Zambia

Abstract

This study examined the impact of the COVID-19 pandemic on employment among Small and Medium Enterprises (SMEs) in Zambia. Data for the study were obtained from three rounds of the World Bank Enterprise Surveys (WBES) conducted between September 2019 and February 2021, supplemented by Key Informant Interviews (KIIs) with relevant business associations. The sample consisted of 601 non-agricultural private economy firms, with descriptive and inferential analyses conducted using Stata 15.0 and Microsoft Excel. The findings reveal that about 3.4% and 5% of the firms closed in the first and second waves, respectively.  Notably, a higher percentage of the closed firms were small and had female top managers. Regression Adjustment analysis further demonstrates that the pandemic led to a substantial reduction in jobs among SMEs, with an average decrease of 29% in the first wave and 20% in the second wave. Female-owned firms faced a more significant impact on employment compared to male-owned firms. The study highlights the urgency for targeted policies that address firm mortality, support female entrepreneurs, and mitigate unemployment challenges in the SME sector. By implementing gender-inclusive support programs, facilitating access to credit and digital transformation, and promoting business resilience, Zambia can nurture a more robust and equitable SME sector, contributing to job creation in the post-pandemic era.