Zambia Covid-19 Poverty Monitor April 2021

Abstract

Loss of income from businesses: Zambia went into a partial lockdown when it recorded the first cases of Covid-19 in March 2020. Some micro, small and medium enterprises (MSMEs) such as bars, cinemas, lodges, hotels, saloons and barbershops were completely shut down while other MSMEs were allowed to operate with restricted hours and conditions. Non-essential foreign travel was discouraged. The easing of lockdown measures was phased with bars being the last open on a government-controlled schedule. Some people who were running micro and small enterprises before the partial lockdown said they were unable to resume operations after lockdown measures eased as they had spent all their money during the partial lockdown, costs of doing business have increased and/or reduced volume of customers due to fears of Covid-19. All MSMEs who managed to resume operations report a decline in revenue. Those involved in cross border trade report difficulties in conducting business due to additional Covid-19 restrictions at the borders which are exacerbated by the continued depreciation of the local currency (Zambian kwacha) against the US dollar and other major currencies: the kwacha weakened by about 9% between September 2020 and February 2021. The majority of people also report cautious and limited patronage of business places due to fear of contracting Covid-19, which has further reduced the income of MSMEs. Loss of business income is common in both urban and rural areas.