The Solomon Islands Chamber of Commerce and Industry (SICCI) acknowledges that 2020 is one of the most challenging year not only for the business community but also for Solomon Islands as a country.
SICCI, as the peak body representing private sector in Solomon Islands, was responding to a statement made by the Honorable Prime Minister Manasseh Sogavare in his nationwide address on the occasion of the country’s 42nd Independence Anniversary on July 7.
The Prime Minister asserted that the COVID-19 global pandemic is causing human costs worldwide, and the protection measures on social distancing and travel restrictions are impacting economic activities on a global scale.
He said a slowing economy and ongoing international disruptions hurts business, negatively impacts our farmers, and ultimately impacts our people and our communities across the country.
“The COVID-19 pandemic is having a severe impact on our economy. Even though we have no cases, we feel the economic impact on our shores,” Hon Sogavare said.
According to a recent enterprise survey the Chamber conducted on its members and the wider business community, ninety-seven percent (97%) of respondents reported COVID-19 having a financial impact on their business with forty-seven percent (47%) reported high financial impact.
“From the survey we found out that six percent (6%) of those that responded have stopped operating and around forty-percent (40%) had to cut down on their workforce and lay off workers,” SICCI’s Membership and Services Officer, Ms Naomi Mara, who took lead in facilitating the survey, said.
From the two enterprise surveys the conducted since Government declared a State of Emergency, a simple tally indicated that five to six hundred workers have been impacted directly.
What this means is Solomon Islanders are losing their income, but more significantly, this is the income they use to support their families and their communities.
Many businesses say maintaining customers and cash flow to maintain employees and their operations are the main challenges businesses currently face as a direct result of the COVID-19 global pandemic.
“Twenty-Six (26) percent say their customer and clients base have been affected and demand is lower than normal while twenty-Two (22) percent identified cash flow as the main challenge in maintaining staff and operations is inadequate,” Ms Mara said.
She further highlighted that the recent survey was conducted with sixty-four (64) businesses and the majority of the responses (47%) were from Small and Medium Enterprises (SMEs) employing less than twenty (20) employees, and also representing different sectors.
Businesses are also finding it harder to operate because of the impacts from travel restrictions.
Twenty-one percent (21%) of surveyed businesses stated that the order ‘restricting the movement of vessels and aircrafts’ affects their business the most.
“Because of these things, many businesses are not operating normally like before and many business owners are also finding it hard to repay loans they have with commercial banks,” Ms Mara said.
Some of the suggestions the Chamber has made to Government to assist businesses at this time included the reduction of the cost of electricity for a longer period of time [leaving businesses with more cashflow to help them operate] and outstanding payments from Government to be done efficiently [because when payments are delayed it makes the situation, we are in a lot worse for some of the businesses and our members].
In his Independence address the Prime Minister Hon Sogavare said as a country, we have moved fast to protect our people from the risks, and we have moved quickly to design the stimulus package which will be vital to support activity to cushion the negative impact and keep our economy afloat.
The SICCI survey, meanwhile, agreed that the Government’s Stimulus Package is offering some relief for struggling businesses.
Forty percent (40%) of businesses that responded find the Soft Measures allocations for tariff reduction, rental relief and loan repayment relief as ‘most helpful’ and the Immediate Recovery Measures and Medium to Long-terms support as to an extent, also helpful.
The Chamber reiterates that any stimulus support to businesses or the private sector needs to be timely and delivered as promised.
“Business make plans based on these commitments from Government and if any of these promises for assistance is not delivered then it makes it a lot harder for businesses who are struggling at the moment.
“It is important that as a country we find the right balance between the health of our communities and also our livelihoods,” a SICCI statement said when releasing the survey results last week.
Meanwhile, Prime Minister Hon Sogavare said his Government will work constructively to pursue priority reforms opportunities and provide a basis for sustainable long-term growth on a broader economic base. We understand the issues at play.
“We are closely monitoring and managing the economic situation by planning ahead while being ready to act as and when required.
“Core components of the stimulus package have commenced, important infrastructure spending is in the pipeline and further reforms to the business environment will assist in the post-COVID-19 landscape,” he said.
SICCI Membership and Services Officer, Ms Mara concludes with this statement: “The urgency before us remains the same, and the two surveys confirm this. And that is that we must work together Government and private sector to achieve three things, to protect people and their livelihoods, to keep workers employed so that they can continue to support their families and thirdly, but also important is the sustaining of critical support for our businesses during this challenging time.”