Businesses struggle to pick up despite lockdown easing

Business operators at a commercial building in Kigali’s Central Business District on Tuesday, May 26, 2020. With customer movements still restricted, many businesses are struggling to shore up their cash flow. / Photo: Craish Bahizi.

The coronavirus outbreak has continued to push many small and medium enterprises on the edge even as the government recently lifted some lockdown restriction, allowing some businesses to resume operations.

Business operators in Kigali’s Central Business District told The New Times that they are still struggling to shore up their cash flow with customer movements still restricted.

 

The people’s purchasing power has also dropped significantly.

 

Eriel Nkurunziza owns a clothing store in downtown.

 

Vendors attend to a client inside a stationery shop in Kigali Central Business District. Many business operators say that people’s purchasing power has also dropped significantly. Photo: Craish Bahizi.

He told The New Times that despite the ease of lockdown restrictions, the trend of sales may not be sufficient enough to even offset the Rwf5 million he pays every quarter in rent expenses.

“I used to pay rent and other expenses very easily, but today I can’t even earn enough money to pay rent,” he said.

Nkurunziza explained that his customers involved brides and bridegrooms to be as well as customers from the countryside.

With weddings temporarily suspended and inter provincial travels banned, Nkurunziza says his business is still struggling.

Françoise Uwamahoro, who owns a stationery store in Nyarugenge District, is also still operating in losses.

“We no longer get clients as we used to, there are even times you go home without receiving a single client,” she said. “This is because most of our clients are schools, students and people who do office work.”

Under the current government directives meant to contain the spread of coronavirus schools will remain closed until September while most companies and public organisations continue to encourage people to work from home.

This has translated into a sustained plunge in business activity for businesses such as the one that Uwamahoro runs.

Businesses that sell household materials are also struggling to pick up momentum

“For us, our customers are mainly people who are about to get married, hotels and restaurants. Now that they no longer function as usual, we are just surviving on very few clients,” said Eva Cynthia, a trader.

So far, Rwanda has 339 Covid-19 confirmed cases, of whom 244 have recovered.

The Government is expected to issue fresh directives on June 1, in relation to containing the pandemic, which will further lift restrictions and allow more business to operate.

For instance, taxi moto operators and public buses that ply upcountry routes will resume operations on June 1.

Some business operators are optimistic about future business prospects.

Cashless payments on the rise

Paul Karangwa (not real name) sells mobile phones and says that, different from the period before lockdown, his customers embraced cashless payments.

“On average, I can now sell five mobile phones a day- half of what I used to sell. Our customers now understand cashless payments than ever, almost 90 per cent of customers we receive pay us using Mobile Money and POS,” he said.

Cynthia also noted that “Half of our current few clients pay us using mobile money.”

The Government continues to encourage cashless transactions over cash payments in bid to prevent the spread of Covid-19 which, as proved by the World Health Organization, can remain on surfaces including money for hours.

Data by Rwanda Utilities Regulation Authority shows that the value of funds transferred via mobile money grew by 450 per cent between January and April this year to reach Rwf40 billion.

editor@newtimesrwanda.com

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