The Ministry of Trade and the Confederation of Regional Business Chambers are challenging each other over the true number of retail businesses that will be forced to close down because of the economic fallout of the COVID-19 pandemic.
Yesterday, the ministry said it was “unrealistic” that an estimated 6,000 businesses will remain permanently closed when the retail sector is finally reopened on Monday.
Co-ordinator of the confederation Jai Leladharsingh had told Guardian Media on Tuesday that based on a survey done by the orginsation, about 6,000 out of 17,000 micro, small and medium enterprises are facing economic decimation.
But the ministry is questioning that number and noted that a copy of the survey had not been provided to it.
“According to the Central Statistical Office (CSO), as of 2019, the sector comprised approximately 8,656 business establishments, contributing an estimated 13 per cent or approximately TT$20.3 billion annually to the country’s gross domestic product (GDP) and employs in excess of 78,000 persons. It is, therefore, unrealistic that 6,000 business entities in the retail sector will remain closed,” a release from the ministry said yesterday.
The Trade Ministry also said it has accelerated the outstanding VAT refunds to businesses to assist their cash flow during the pandemic. This was one recommendation that had been put forward by Leladharsingh.
Other measures included increased supply of Forex, a concern that has been raised by the business community, a tax amnesty and $20,000 grants for micro-enterprises generating less than $1 million in annual revenues under the National Entrepreneurship Development Company (NEDCO).
“In order to address the financing constraints faced by manufacturers and importers in terms of the availability of foreign exchange to finance imports of basic food, essential items and inputs into the production process, the Government allocated approximately US$400 million via the EXIMBANK Ltd.”
The Trade Ministry added that soft loans had been provided to credit unions to assist business people, along with the SME Stimulus Loan Guarantee Programme. Under this programme, it said a Government-guaranteed loan was offered for a maximum of five years with a two-year moratorium on principal payments.
“The Government guarantees 75 per cent of the loan and no payment is required by the customer for two years. Eligible SMEs would be able to access between TT$75,000 to TT$325,000 based on their annual sales revenue to cover salaries, operational expenses and the purchase of raw materials. The loan has zero per cent interest. The Ministry of Finance is giving attention to the terms of these arrangements.”
It also said that grants had been arranged for the business community.
The Trade Ministry also said the Government has maintained some aspects of the retail sector operations by allowing discount stores, markets, supermarkets, fruit stalls or shops, vegetable stalls or shops, agricultural shops, bakeries, and “parlours,” pharmacies and hardwares to be opened.
“Energy, manufacturing, and other sectors remained substantially opened,” the ministry added.
However, Leladharsingh yesterday said he was standing by his data, which was gathered and collated between October 2020 and May 2021.
“Has the Ministry done any surveys regarding how SMEs are coping during this lockdown and the presence of COVID-19 pandemic and if they did not, how can they refute this data?” he asked.
He revealed that there is a large unstudied informal sector comprising of unregistered micro-enterprises, insisting that his figure of 6,000 was not unrealistic.
“A quick survey was conducted to determine the resilience and recovery of the MSME (Micro, Small, and Medium) sector between October 2020 and May 2021. Given the presence of the COVID-19 pandemic and the lockdown, it was a serious challenge for these SMEs to recover. Owing to their size, their resilience is quite limited, as they can handle only a limited amount of debt,” he said.
Asked what methodology was used to gather and collate the survey, Leladharsingh said: “ The methodology used were telephone calls, expert opinions, secondary data and trend analysis. At the time data was gathered, it was not meant to be shared or published. It was a confidential document to determine the survivability of the SMEs.”
The confederation comprises over 15 members, including business chambers, business associations and business corporations.
On Tuesday, Downtown Owners and Merchants Association president Gregory Aboud said the figure presented by Leladharsingh was far higher than he would have expected. In the capital city, he said about 10 per cent or 15 per cent of small businesses had closed down. In San Fernando, Greater San Fernando Chamber of Industry and Commerce president Kiran Singh said 25 per cent of businesses, roughly about 200 located in and around the city have permanently closed their doors.
