Impact of COVID-19 on Small and Medium-sized Enterprises (SMEs) in Iraq

In order to shed light on the impact of COVID-19 on Small and Medium Enterprises (SMEs), which were affected by closures and reduced working hours, IOM conducted a survey with 456 enterprises active in different sectors in urban areas of Iraq in April 2020. The inquiry focused on governorates with the highest rates of displacement, returns, and ex-combatants as identified by IOM. In order to measure the effects of COVID-19 on SMEs, the research uses a stratified sampling strategy applied to a database of urban employers in the areas where IOM’s Enterprise Development Fund (EDF) has been implemented.

The analysis found a significant impact on economic outcomes at the firm level. Effects on sales and production among firms have been the most pointed, with temporary reductions in paid employment also reflected. These have been especially noticeable within the construction and manufacturing industry, followed by the food and agriculture industry. For more details, see the IOM produced factsheets, dashboard and report.

Factsheets
All Sectors
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Construction and Manufacturing
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Food and Agriculture
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Services
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Wholesale and Retail
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Dashboard
Panel Study I:
IMPACT OF COVID-19 ON SMALL- AND
MEDIUM-SIZED ENTERPRISES IN IRAQ

Measures taken to curb the spread of COVID-19 have led to reduced operating hours or the closure of many of Iraq’s small- and medium-sized enterprises (SMEs). Although restrictions, including curfews, school closures, and restrictions on travel into and within the country, eased after the first few months of the COVID-19 response, the economic impact of the pandemic is expected to be severe. To measure the losses and investigate how SMEs are coping with movement restrictions, the International Organization for Migration (IOM) in Iraq, the Food and Agriculture Organization (FAO), and the International Trade Center (ITC) launched a panel study following 893 enterprises, focusing on 15 governorates and 16 sectors. Findings show that COVID-19 has negatively affected production on average by 67 per cent, employment by 27 per cent, and monthly revenues by 63 per cent February and June. More than half of the businesses had difficulties accessing their most important inputs and four out of five SME owners faced lower domestic consumer sales. Almost three out of five SMEs interviewed reported that they were at risk of permanently shutting down. The most common approach was to reduce the number of employees, a strategy adopted by 34 per cent of the SMEs. A potential result of this coping mechanism is an increase in the gender gap among these SMEs by 30 per cent. The first round of data collection took place from 22 June to 7 July 2020 and focused on. Two more survey rounds with the same 893 businesses will take place in September and December 2020 to continue analyzing the impact of COVID-19 crisis on production, labor, revenues and access to inputs.

Factsheets
All Sectors
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Food and Agriculture
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