Impact of COVID-19 on Micro, Small and Medium Enterprises in Dire Dawa Administration

Abstract

Background: Micro, Small and Medium Enterprises have long been engines for social and economic wellbeing of nations in every corner of the world. They play pivotal role in reducing poverty through creating massive employment opportunities, socio-cultural integration, and adds value for GDP growth. The main objective of this study was is to assess the impact of COVID-19 on Micro, Small and Medium Scale Enterprises in Dire Dawa Town

Method: The study was done on 790 Micro, Small and Medium Enterprises in Dire Dawa town. A cross-sectional study design was employed. Stratified sampling technic was employed to select study participants. Data were collected using structured questionnaire and analyzed using SPSS version 24. Data was analyzed using binary logistic regression model.

Result: Our study revealed that 81.65% of Micro, Small and Medium Enterprises were highly economically affected due to the emergence of COVID-19. Among the five sectors, service sector (85.2%), trade (84.4%) and construction (83.1%) sectors were more economically impacted. The economic impact level of Micro and Small enterprises were estimated to be 84.16% and 82.46% respectively. Based on multivariable analysis, Managers’ education level {no grade [AOR = 4.748, 95%, CI: 2.264, 18.581], ownership, {partnership [AOR = 0.289, 95%, CI: 0.085, 0.984], Association [AOR = 4.337, 95%,CI: 1.216, 15.469], workers delay to work [AOR = 4.337, 95%CI: 1.162, 10.265], and absenteeism of workers [AOR = 0.284, 95%CI: 0.094, 0.851] were significantly associated with economic impact level of Micro, Small and Medium Enterprises during the pandemic.

Conclusion: The study has found that enterprises have faced payment shortages for house/machine rent and material as well as supply chain problem due to emergence of Covid-19. It has been also indicated that annual sells, revenue, saving and employment have been seriously decreased. The government should help enterprises by solving the financial and supply chain related problems.