Small businesses in Barbados are facing an existential threat, says Chief Executive Officer of the Small Business Association (SBA) Senator Dr Lynette Holder. She warned that an already challenging environment has been made worse by recent natural disasters, and rising fuel prices and the Garbage and Sewage Contribution (GSC) levy have been acting like a “noose” around the proverbial neck of the businesses.
However, the SBA leader is urging operators in the micro, small and medium-sized enterprise (MSME) sector not to cave under the pressure. At the same time, Holder is calling on policymakers to do more to stave off business closures, adding that “we need a greater effort on the part of policymakers, financiers and development agencies to do more to strengthen the business environment at this time”.
“It will be years before we fully understand the full economic impact of the coronavirus pandemic on the world’s economies, but one thing is painfully clear right now; small businesses across the country are facing an existential threat,” said Holder.
“There is no doubt that many small businesses are drained and some practitioners are weary of what lies ahead. However, despite all that is happening around you, and though things may seem bleak at this time, I implore you to remain steady in your resolve to survive,” she said.
Pointing to an A COVID-19 Business Impact Survey done by the International Trade Centre in April 2020 from 4467 companies in 132 countries, Holder noted that almost 40 per cent of business operations were facing a liquidity crisis due to clients not paying bills.
Additionally, it was recorded that 75 per cent of businesses faced reduced sales with micro and small firms being more impacted than larger businesses and over 20 per cent of small businesses facing the risk of full closure. She said: “With lockdowns, curfews and other COVID-19 regulations still being enforced, it is safe to assume that these percentages have since risen significantly”.
“Locally, these challenges have been compounded this year alone by the volcanic ash fall which hindered regular business operations for weeks, and required untimely expenditure on cleaning and infrastructural damage.
Adding to this is now the magnified fear surrounding the heightened activity predicted for the 2021 Hurricane Season. Our first brush with the category one hurricane, Elsa, left many businesses with structural damage and without electricity or water for days,” she recalled.
“Further exacerbating the situation has been the rise in fuel costs and the levy on water prices, which is acting like a tightened noose around the neck of many small firms who have not been able to regain their footing in the midst of all that has occurred in the last year,” said Holder.
She said in this month’s SBA Business Outlook that the one “silver lining” in the cloud of uncertainty was that small firms had the propensity to bounce back. “They are nimble and can adapt,” said Holder.
However, the SBA head said it was time for the voice of the lobbyists and representative groups to be amplified “to ensure that the MSME sector is not overlooked in the country’s economic recovery efforts”.
“We therefore cannot be daunted; we will make it through together. Stand firm. Stay focused. Do not be moved!” said Holder.