Economic Impacts of COVID-19 Pandemic on Business Sectors: Lesson from West Hararge Zone, Oromia, Ethiopia

ABSTRACT

This research aimed to assess the economic impacts of COVID – 19 pandemic on business sectors of the west Hararge zone, Ethiopia. The study has used both qualitative and quantitative cross-sectional data which is collected from 378 sample respondents. The data was collected through a structured questionnaire and key informant interview. The findings of the study indicate that COVID – the 19 pandemics have resulted in job loss, raw material deficiency, decrease in demand and supply, increased price, low sales, and a decline in profit level of business sectors in the west Hararge zone. The study revealed that businesses operating in the service sector, working in rental premises, and businesses owned by individuals are the most economically vulnerable business groups to the effects of the COVID -19 pandemic. Even with their vulnerability to COVID – 19 effects, the majority of businesses were operating partially. Moreover, the study showed that changes in demand; supply, sales volume, and sales price are some of the factors that affect the profitability of formal business sectors during the pandemic. Businesses have used coping strategies like a reduction in their input consumption, reduction of employees, an increase in the marketing effort, engaging in additional business activities, borrowing funds, and decreasing the salary of their employees to cop up from the adverse impacts of COVID – 19 on their economic activities. The study has recommended the need of supporting businesses involved in the service sector, businesses owned by private entities, and businesses working in rental premises by providing loans, subsidies, tax concessions, and other mechanisms.

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