Building recovery and resilience of Mauritian MSMEs in the midst of the COVID-19 pandemic

Abstract

The paper assesses the performance and recovery of Mauritian MSMEs in the midst of the COVID-19 pandemic. The study probes into a series of internal measures and plans set out by MSMEs to mitigate the effects of the pandemic and also dwells into the various government support provided in softening the effects of the crisis on MSMEs in sectors highly impacted by the pandemic. Based on a survey of 380 firms and 15 interviews carried out with entrepreneurs across varied economic sectors over two different time periods (that is after the first lockdown in March 2020 and after the second lockdown in March 2021), the results indicate that micro, small and medium-sized firms have been highly impacted by the pandemic with severe contractions in their overall performance. In addition to performance in domestic sales, recovery is assessed in terms of exports, investment and profits. It is observed that recovery is more difficult for male-headed businesses compared to their female counterparts. There is also clear evidence that resilience measures adopted such as a reduction in the number of working hours along with market diversification and price adjustments have proved to be effective in mitigating the impact of the crisis. One major strategy, that, however, stands out and proves to be vital for the recovery of MSMEs is the adoption of e-commerce. However, government support in terms of the wage assistance scheme does not have a statistically significant impact on the performance and recovery of MSMEs, except for a negative effect on their exports level.

Keywords

• COVID-19
• MSMEs
• Performance
• Recovery
• Resilience Measures
• Mauritius