How SMEs Coped with the Impact of Covid-19; Results from a Survey in Accra, Ghana

Abstract

This research explored how Small and Medium Enterprises (SMEs) coped with the impact of COVID-19 on the Ghanaian economy. The relevance of this research goes as far as the economic strength of the country as SMEs account for nearly 70% of Ghana's total GDP. This means the findings from this research have a significant effect on the macroeconomic indicators of the country as a whole. The study examined results from 864 SMEs in the Greater Accra Region of Ghana that were selected under the purposive sampling method. Various SMEs, including business operations in the hospitality, trading, manufacturing, fashion, and IT industries, were included in the study. The results indicated that the effects of the Covid-19 pandemic on the survival of SMEs were evident as the global economic crisis disrupted business operations, including supply chain and manufacturing activities which resulted in operating cash flow, profitability, and loan repayment challenges. To cope with the impact of the pandemic, most SMEs implored several strategies mainly service outsourcing and downsizing of employees, among other operational interventions. Those in the IT service industry intensified their online presence to leverage the opportunities. The government also provided business support packages to cushion the impact of the pandemic. In conclusion, as SMEs are a strong support system to the economy, the government ought to create an enabling environment for their sustainability at all times, especially during economic meltdowns like the covid-19 global pandemic.