SMEs incur $5.3 billion in flood losses

25% or 197,658 economic establishments affected across the country

LAHORE:

The recent floods have affected around 25% or 197,658 economic establishments (Small and Medium Enterprises (SMEs)) across the country, with the total loss incurred being estimated at around $5.3 billion.

There has also been a sizable increase in the unemployment rate in flood-hit areas as 54% employees working in SMEs have lost their jobs, according to a preliminary assessment report issued by the Small and Medium Enterprises Development Authority (SMEDA). The report was launched by SMEDA CEO, Hashim Raza on Monday.

The survey stated that the maximum loss has been incurred in Sindh, amounting to $3.85 billion, followed by Khyber Pakhtunkhwa (KP) at $0.66 billion. Losses in Punjab were estimated at $0.42 billion, followed by Balochistan at $0.35 billion.

As per the survey, 50% respondents are from the services sector, while 40% belong to the agriculture sector and 10% are from the industrial sector. The respondents come from the following sectors: livestock, meat shops, construction, wood work, cotton, rice and wheat growers, catering services, flour mills, concrete production, fishing, marble cutting, auto parts, coffee and tea shops, cotton ginning, hotel and restaurants and dairy.

The average monthly sales turnover of the surveyed economic establishments stands at Rs2.3 million while the annual sales turnover is Rs27.6 million.

Raza stated that the recent floods in Pakistan were one of the worst natural disasters in Pakistan’s history. Over 33 million people (14% of the country’s total population) have been affected by the floods. The scale of the damage can be gauged from the fact that the floods hit more than 90 of 160 districts in the country.

“In Pakistan, 90 districts have been declared calamity-hit. Of these, 32 are in Balochistan, 24 in Sindh, 17 in KP, nine in Gilgit-Baltistan (GB), five in Azad Jammu & Kashmir (AJK) and three in Punjab,” he added.

“Analysis has been conducted for economic establishments across 71 districts to estimate direct and indirect losses,” he said, adding that both secondary data and primary data were gathered through site visits of Sindh, KP, Balochistan and Punjab to derive estimates of SMEs affected by the floods.

Raza admitted that the “research had its limitations due to lack of accessibility to flood affected areas and unavailability of updated district level data of economic establishments.”

He noted that “according to the findings, 25% of the economic establishments had been completely destroyed in the floods, whereas the rest suffered a total damage of over Rs1.4 billion because of a disruption in supply chain, loss of customers, electricity disruption and other transport network disruption.”

Over 20% of the surveyed SMEs have an estimated annual sales turnover loss of Rs1.3 billion.

For their economic revival, 86% of the surveyed SMEs have demanded subsidised provision of specific products, inputs or services and 57% of the surveyed SMEs have also demanded access to new loans.

Published in The Express Tribune, December 27^th, 2022.

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