Over 40 per cent of the businesses in the East African Region are uncertain of their business continuity six months from now due to the COVID-19 pandemic, a survey by the East African Business Council has shown. The survey showed that the pandemic and measures to curb it have generated substantial uncertainty for business which could result in closure of business and investments. 41.2 per cent of the respondents said that their business maybe not sustainable for more than 6 months while 29.4 per cent said their business may sustain between 6 months and 1 year. Only about 11 per cent of businesses said their business will be able to sustain for between one and two years if the situation of COVID-19 pandemic continues. However, the business council figures that the challenges could be mitigated through the planned stimulus packages for most affected businesses as well as the central bank’s lending facility to commercial banks. For instance, Rwandans are awaiting a new special fund for business recovery in May, it is expected that there will lead to further liquidity in the financial market. The uncertainty further poses challenges to employment across the region, risking undoing any gains made over the years. With the uncertainty of the economic conditions and possible stagnation, 45.5 per cent of enterprises in the region that they are still yet to decide on the fate of their staff in regard to lay-offs. 36.4 per cent have decided to lay off staff and 18.2 per cent said they will not lay off their staff. Laying off of staff will have multiple effects on EAC economies including a decline of disposable income and consequently reduced consumption. Reduce consumption means that industries would in turn produce less, source less raw materials. This the organisation led by Peter Mathuki figures that can be addressed by EAC considering temporary removal of employment taxes/levies, skill development levies). This they said will encourage employers to retain the existing workers and do away with downsizing in the midst of COVID-19 pandemic. Among the top effects the pandemic has been found to have in the region on businesses include; decline in sales, increased cross border restrictions and challenges to source raw materials. Other reported effects include reduction in the export market, laying off staff delay of contracts and reduction of spending by customers.
