How has the Covid-19 impacted businesses in Togo?

Economic governance
Tuesday, 15 September 2020 17:15
How has the Covid-19 impacted businesses in Togo?

(Togo First) - Around one out of four (23.1%) of businesses ceased operations in Togo after the government imposed restrictive measures to contain the spread of Covid-19. Out of those, only 2% of them had to shut down completely. 

The World Bank revealed this in its latest report of the economic situation in Togo, published on Sept. 8. The related study was conducted at the beginning of June and businesses surveyed had been closed for about 10 weeks. 

Impact of shutdowns: Size matters

According to the document, small and big businesses responded to the closure differently. Big firms were more resilient than small ones. 

“Closing rates vary depending on the size of businesses and are higher for micro and medium businesses (22-30%) than for big businesses (around 13.6%),” the report states. No big business was shut down at the time of the study. 

Additionally, the World Bank noted that SMEs that closed down were those without appropriate protection against the crisis. According to the institution’s pundits, they were already going through tough times or had difficulties getting emergency funding, unlike big companies.

Fewer local businesses closed 

Similarly, there is a disparity between businesses owned by Togolese citizens and foreigners. 

“Almost 42% of the private companies owned by foreigners have closed, against around 20% of local private firms.” 

A significant impact on earnings

In terms of revenues, according to the WB, the pandemic had a significant impact on businesses' earnings. 

Here, however, the fall did not vary based on the size or the sector of activity of businesses. 

Data available indicates that “96.2% of businesses reported a drop in sales in the past 30 days.”  Let’s recall that according to the report, around 62% of jobs were affected, including 49% in services and 13% in the industrial sector. 

Ayi Renaud Dossavi

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