COVID-19 threatens businesses, ECONOMY

Local businesses have expressed concern over economic consequences following of travel restrictions and border shutdowns by some countries.

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) chief executive officer Chancellor Kaferapanjira in an interview with Business News yesterday said that local businesses are not spared the coronavirus threat with hospitality, retail businesses and the travel industry  among the worst affected sectors.

SMEs may struggle to remain in business

“Businesses that are dependent on the supply chain, such as companies that import raw materials and supplies as well as exporting companies are likely to experience a slowdown because of operational interruptions in movement of shipments as borders either close or become extremely strict in allowing cross-border trade,” he said, adding that companies in the logistics industry are also subject to the same uncertainities.

Speaking separately, Chamber for Small and Medium Enterprises president James Chiutsi feared a shortage of critical raw materials and inputs for production.

“We have several members in the import and export business whose incomes are affected and the reciprocal effect is that these businesses will fail to satisfy their needs and remain in business,” he said. 

 Chiutsi shared sentiments with Cross Border Association of Malawi present Esther Tchukambiri who said businesses are already facing challenges in view of the travel restrictions and border shutdown.

Economics Association of Malawi (Ecama) president Lauryn Nyasulu on Saturday also feared for the worst, economically, in view of the development.

She said: “Companies that rely on imported raw materials will have their production and profitability affected.”

“But all this trickles down to revenue collection as there would be a decline in trade as such taxes and other business-related taxes will be minimal. These challenges will make it difficult to make revenue projections for effective planning.” 

Ministry of Trade, Industry and Tourism spokesperson  Mayeso Msokera admitted that the coronavirus outbreak is likely to affect volumes of trade between Malawi and its major trading partners although at the moment, there is no significant impact on the availability of the country’s strategic imports as supply chains are still functional.

There is no confirmed  coronavirus case in Malawi.

Meanwhile, neigbouring Tanzania, Zambia and SouthAfrica, who are Malawi’s key trade partners, have been affected by the virus and governments have taken unprecedented steps, including shutting down airports, imposing travel restrictions and completely sealing their borders.

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