African businesses shifting towards new technologies in response to COVID-19 pandemic – UN report

Makeshift Hospital
Photo taken on Aug. 1, 2020 shows the interior of a makeshift hospital for COVID-19 patients at the AsiaWorld-Expo, a venue near the Hong Kong International Airport, in south China's Hong Kong. (Xinhua/Wu Xiaochu)

African businesses are shifting towards new technologies in response to the ongoing COVID-19 pandemic, according to a new report published by the United Nations Economic Commission for Africa (UNECA).

The report, which was jointly published by the UNECA and the International Economics Consulting Ltd., is the second comprehensive survey on the COVID-19 pandemic and its economic impact across Africa, the UNECA disclosed on Tuesday.

The online survey, which was conducted from June 16 to July 20 to provide insights into the effects of the pandemic on economic activity for businesses across Africa, mainly identified the challenges African businesses encountered as well as their responses to mitigate the adverse impact of the pandemic.

According to the report, the results of the survey show that the top three challenges faced by African companies in the wake of the ongoing COVID-19 pandemic are reduced opportunities to meet new customers drop in demand for products and services, as well as lack of cash flow.

“Companies have faced serious disruptions in both supply and market due to COVID-19, with unfair pricing seen as a major concern,” the report read, while feedback from companies about government assistance “is mixed with nearly two-thirds of the respondents indicating from moderate to no satisfaction,” it said.

The report also indicated that “companies are currently working at about half their capacity” as company revenues are expected to drop by about 18 percent in 2020, as compared to 2019, and lay-offs to increase by 20 percent in the next three months.

The report also noted that remote working options proved more challenging for micro, small and medium enterprises (MSMEs), particularly those dealing with goods, whose performance has been relatively more negatively affected than larger-sized companies and more generally those involved in services.

It also noted that women are more at risk of being laid-off than men, which is consistent with the fact that women tend to be employed more in MSMEs in which their primary business is related to goods.

According to the UNECA, one of the main takeaways from this survey is the very positive fact that two-thirds of the surveyed companies indicated that they have identified new opportunities in response to the crisis.

Simon Mevel, Economics Affairs Officer at the Regional Integration and Trade Division at the ECA, also stressed that firms involved in goods and MSMEs are displaying “the highest shares in terms of new opportunities identified following the crisis, which in turn is expected to be positive from a gender point of view as women are primarily engaged in MSMEs dealing with goods.”

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