Egypt’s Planning Ministry reveals survey results over impact of pandemic on MSMEs

On the occasion of the Micro, Small and Medium-sized Enterprises (MSMEs) Day, the Ministry of Planning and Economic Development announced the results of a field survey of the impact of the coronavirus pandemic on MSMEs.

Minister of Planning and Economic Development Hala El-Said stressed that the MSMEs are a major driver of the Egyptian economy and are one of the fastest-growing sectors that promote economic growth and boost regional development.
The results were revealed in the presence of several international partners, led by the Japanese Ambassador to Egypt Masaki Noke; Mr. Tako Mitsuburi, Economic Counselor of the Embassy of Japan in Egypt; Ms. Randa Aboul-Hosn, Resident Representative of the United Nations Development Program in Egypt; and Mr. Samuel Kamara, Country Program Officer for Egypt at the African Development Bank; Eng. Tarek Shash, Deputy Executive Director of the Medium, Small and Micro Enterprise Development Agency; Dr. Raafat Abbas, Head of the Central Sector for Non-Financial Services in the MSME Development Authority.
The meeting was attended by Dr. Ahmed Kamali, Deputy Minister of Planning, and Dr. Reham Rizk, Head of the Modeling and Forecasting Unit at the Ministry.

The minister indicated that these projects play an important role in job creation and that they are one of the top priorities for the Egyptian government to help boost its economy and achieve sustainable development goals.
During the meeting, the results of the survey conducted using a model of 5,500 companies during the period from July 19 to September 2020, were reviewed. Almost, 75% of the companies suffered from a decline in their operations, while about 9% stopped working, with major companies and the manufacturing sector feeling the hardest hit.
Concerning the effects of the pandemic on employment, the results showed a 15% decrease in MSMEs employment due to the pandemic, this is equivalent to 1.7 million, most of which are permanent full-time jobs. The survey also showed that MSMEs were hardest hit by lower sales and lower orders, and they are also hardest hit by the increase in costs due to higher energy prices.

El-Said indicated that this sector was widely affected by the coronavirus pandemic, so the Egyptian government was keen to provide the necessary measures to cushion the impact of the pandemic.
These measures include postponement of loan installments for direct lending clients of small business owners (industrial/commercial/agricultural / service) until their conditions stabilize, in addition to postponing the payment or installment of property tax for the affected sectors for three months without delay fees.
The Minister of Planning and Economic Development added that this survey confirms the Egyptian state's keenness to support and develop the micro, small, and medium enterprises sector and the use of scientific tools in formulating policies related to this sector.
She explained that the survey was done in cooperation with several international agencies, especially the UNDPA, AfDB, and the Japan International Cooperation Agency.




For her part, Ms. Nevine Gamea, Minister of Trade and Industry and Micro, Small & Medium Enterprise Development Agency (MSMEDA), said that the state has taken many initiatives and incentives to mitigate the impacts of the pandemic on the MSMEs sector. 
Her speech was delivered by MSMEDA Deputy Executive Director Tarek Shash. 
Gamea added that the MSMEDA participated in the implementation of a national survey to measure the effects of the pandemic on the sector in cooperation with the Central Agency for Public Mobilization and Statistics and under the auspices of the Ministry of Planning and Economic Development.

She praised the great role played by the Ministry of Planning and Economic Development to coordinate efforts and reach quick solutions to overcome the negative economic effects resulting from the pandemic.

During her speech, Ms. Randa Aboul-Hosn UNDP Resident Representative in Egypt stressed the importance of studying the impact of the pandemic impact on MSMEs in Egypt, as this sector is the backbone of the Egyptian economy, as there are approximately 3.74 million companies, and it represents 44.6% of total institutions in the formal private sector. 

The results of the survey will support a set of policies that will improve and facilitate the work of the projects and support their production capacity and sustainability, in addition to facing the negative repercussions of Covid-19.
Aboul-Hosn affirmed the continued support of UNDP for this sector through partnership with the MSMEDA because of its special importance in strengthening the economy and providing job opportunities for a large number of Egyptians.
AFDB, represented by Mr. Samuel Kamara and Ms. Gehane El-Sokkary, emphasized the African Development Bank's support for MSMEs as a major driver of private sector growth and employment potential.
“It is important that MSMEs are given access to effective financial and non-financial services to continue to grow and become resilient amid epidemics and crises,” said the socio-economic expert at the African Development Bank El-Sokkary.
“Among the necessary measures to be taken is raising awareness about energy efficiency measures as a way to save production and operating costs for MSMEs,” said Country Program Officer for Egypt at the African Development Bank Kamara. 
For his part, Mr. Masaki Noke, Ambassador of Japan to Egypt, praised the government's serious effortsto address the COVID-19 crisis, stressing the Egyptian macroeconomic performance, which is one of the best in the region, and this is evidenced by the continuation of positive growth, a reduction in the budget deficit, and moderate inflation.
The Ambassador affirmed that Japan is determined to continue keeping pace with the Egyptian experience of sustainable and comprehensive development, especially MSMEs.

During the meeting, a set of recommendations were reviewed, including closely monitoring the use and effectiveness of liquidity support measures and frequently reviewing their eligibility criteria.
The recommendations also included expanding coverage and improving the targeting of liquidity support measures through temporary payments to laid-off workers, especially for women in rural areas.
The recommendations also included structural measures that include non-financial services aimed at helping MSMEs adapt to the changing business environment and build resilience, support innovation and technology development,
These measures include supporting skills development; sourcing inputs and production requirements; developing equipment and machinery; supporting sustainability; supporting start-ups facilitating borrowing; initiating an ambitious large-scale digital program; fast-tracking public procurement to open new markets for MSMEs.
In addition to developing and implementing supplier development programs, especially in agricultural and manufacturing commercial value chains, with a focus on the border governorates and the governorates of Upper Egypt, in addition to providing financial assistance by reducing energy prices, reducing rents and lowering tax rates.
The field survey of the impact of the coronavirus pandemic impact on MSMEs included conducting a telephone survey of about 2,000 Egyptian micro, small, and medium enterprises. Another 5,500 MSMEs were surveyed by the Central Agency for Mobilization General and Statistics in cooperation with the Ministry of Trade and Industry, Small, Medium and Micro Enterprise Development Agency, African Development Bank, United Nations Development Program, Japan International Cooperation Agency.