ADMAS UNIVERSITY SCHOOL OF POSTGRADUATE

Article Review

Small Businesses and their Challenges during COVID-19 Pandemic in Developing

Countries: in the case of Ethiopia.

Group Assignment

Name ID

1.Michael Franco Mungo PGMGB1119/22

2.Dawit Girma Gelan PGMGB1199/22

3.Elizabeth Terefe Moges PGMGB1125/22

4.Eleni Asmare PGMGB1024/22

5.Ephrem Tadase Zemede PGMGB1039/22

February, 2023

Addis Ababa, Ethiopia

 Abstract

Ethiopia is one of the countries which were affected by the COVID-19

pandemic. It affected every aspect of political, economic and social life of the
people in the country. The objective of the study is to investigate the small
business challenges during the corona virus pandemic in Ethiopia. The study
used for secondary data analysis following a descriptive research design.
Furthermore, this study was conducted through both qualitative and
quantitative research approaches. The COVID-19 pandemic had causes for
the distraction of many small businesses, job lose, low income and disruption
of demand and supply across the world. The impact was forced on them to
reduce expenses, use different mechanisms to deliver their service and recover
from the shock and avoid head wind.

Keywords: COVID-19 pandemic, small business, Challenges of small business

1. Introduction
Our world has been experiencing a devastated pandemic since the 12th century the Black Death
that swept across the western hemisphere and a left a bad memory for many people. The current
pandemic, COVID-19 is destroying the world economy, shattering many people’s lives and their
livelihood. This virus is highly transmittable and has spread with inconsistent progress in every
corner of the world without any possible solutions for many months, since the declaration of the
world health organization about the existence of COVID-19.

This virus has triggered a substantial short-term economic contraction, shuttered many firms,
whether big or small, thrown tens of millions people out of work. Small businesses are the
backbone of any economy, and with the catastrophic effect of COVID-19 on economies all over
the world, their protection has become important more than ever to keep the healthy float.
Since, the first case of pandemic surfaced in many African countries including Ethiopia, the
governments of sub-Saharan African states have been taking various economic measures to
mitigate its impact. Still the scientific community working day night to find out the exact nature
of the disease, it’s economic and social impact of small scale business and the way forward for
“sustainable solution” in general. According to Alexander et al, (2020), this pandemic exposing
thefinancial fragility and vulnerability small business in developed and developing countries, and
gives a lesson for governments to adopt policies that could overcome the problems shaking the
economy from its foundation.

2. Statement of the Problem

According the author, the existing problem related to COVID-19 and well developed scientific
researches and lack of sufficient findings initiated to conduct this study. So that, the study will
fill the knowledge and other gaps such as researches with inconsistent results that are conducted
in the recent world.

3. Purpose of the Study

The main objective of this study was to investigate the small business challenges during the
corona virus pandemic in Ethiopia.

4. Research Questions or Hypotheses

1. Do small businesses have challenges in operating their business during the pandemic?
What are they?
2. To what extent has these challenges affected their operations?

5. Limitations
The study used secondary data and lack of related article on COVID- 19 pandemic.
6. Literature Review
The literature review presents the overall situation of small business during the pandemic in the
US and comparing its impact during and after analyzing its devastating effects among different
sections of the society. It described the multi-faced situation in Ethiopia and the role played by
the government to mitigate the impact and spillover effect with the shortest possible time. So
that, the study is very important to warn all stakeholders to prepare for the future to overcome
sudden shock due to natural, like COVID-19 and man-made problems. The researcher had made
an effort to analyze the data rigorous to give a clear picture of the development for the time
being. It gives a lot of lessons for general readers about the impact of the pandemic in the sated
period.

7. Methodology
This study used a descriptive research design and employed a mixed approach. It used both
qualitative and quantitative research approaches.

8. Participant

The target population of the study was small business firms operating in Ethiopia during the
corona virus pandemic starting from January 2019- up to September 2020 period.

9. Data Collection Procedures

The study used secondary data analysis by descriptive research design.

10. Data Analysis Procedures

The data analysis technique used under study was the descriptive analysis method and time series
data analysis, because the researchers used secondary data analysis.

11. Results
The study used both qualitative and quantitative research methodologies.The qualitative data
analysis result shows that many small businesses were destroyed, people lost jobs and income
and they were affected psychologically and emotionally. The result from quantitative data
analysis shows that, in the United States of America 41% business activity drops following the
outbreak of the pandemic, especially for black people who own these small businesses. Latin
businesses were also hit hard by COVID-19 losing 32% of active business owners in April, 19%
in May and 10% in June. Asian business owners experienced a 26% decline in business activity
over the critical 2-month window, and continued losses of activity of 21% in May and 10% in
June. Immigrant business owners were also devastated with losses of 36% of business activity in
April. In Ethiopia 30% of small and medium enterprises were affected, 10 to 15% loss their job,
77% of the student were unable to attend the school due to lock down. Generally, these figures
indicated that the pandemic affected every corner of the society.

12. Conclusions and Recommendations

Conclusions

As the finding of the study shows that doing business in this COVID-19 pandemic time is very
challenging and has a dangerous impact on small businesses, worker life as well as the country’s
overall economy. The impact of the pandemic has differed from society to society, with immense
impact on different economic sectors.

Implications of the study

Theoretical implications – This study contributes to the existing literature in crisis management
and identifies the survival and resilience strategies of small businesses during a long-lasting
crisis and challenge.

Practical implications – The actual result of the paper also provide recommendations for small
businesses on how to remain flexible or competitive through resilience and renewal strategies,

Policy implications – Small service firms operate with fewer policy restrictions, firms in these
sectors are more prepared to deal with a crisis. Thus, firms’ preparedness suggests that
expanding regulatory requirements to more service sectors may also help deal with a crisis.
Finally, there is a need for policies and mechanisms that put the small firms in contact with a
broader number and range of stakeholders, including specialists.

Recommendations

This research’s findings recommends that the government of the country should make risk
analysis and business steadiness planning in all critical federal and regional institutions, explore
opportunities for cross-border digital trade, and cooperate with domestic small business firms,
support medium- and long-term business investments that lead to resilient supply chains for
critical goods and services under the market, accelerate development of e-commerce/e-marketing
systems including digital marketing, digital banking, digital payments mechanisms, e-financial
services (e.g., microcredit and micro insurance), a national ID system, and robust digital
communications systems within government and other office activities overall the country.
References

Abriham, E. E. (2022). Small Businesses and their Challenges during COVID-19 Pandemic

in Developing Countries: in the case of Ethiopia. Journal of Innovation and Entrepreneurship.
https://doi.org/10.1186/s13731-021-00191-3.

Small Business and Their Challenges during COVID-19 Pandemic in Developing Countries in
Case of Ethiopia
https://www.researchgate.net/publication/346519619_Small_Business_and_Their_Challenges_D
uring_COVID-19_Pandemic_in_Developing_Countries_in_Case_of_Ethiopia
Reflection

The research project was done within in a big obstacle to collect a primary data and mainly
depended on secondary data; it was also a time human beings activities were halted due to the
pandemic and moving from one place to another to collect data was almost impossible. So by
taking this into consideration the researcher had made an effort to analyze the data rigorous to
give a clear picture of the development for the time being. The research has a good start with the
case being a new topic to be studied and it has benefit for the future researchers as a starting and
also for the government to mitigate a crisis. In our opinion by taking the limitation and the
accessibility of data in to consideration the researcher has done his best to keep the validity and
reliability of the research. The research design is also the preferred on when we consider the
crisis time impact. Regarding its applicability to educational practice it is where we find the
weakness, the researcher stated in his finding that the impact of the COVID-19 pandemic has
disrupted the world education by 89% but the study doesn’t show the educational implication of
the pandemic. In general the research has fulfilled what is required from it even if it has a
weakness and limitation.