Tongan businesses expect long lasting economic damage during CoViD-19 pandemic [1]
Tuesday, July 7, 2020 - 16:35. Updated on Tuesday, July 7, 2020 - 16:46.
The CoViD-19 pandemic restrictions are creating long lasting economic damage to businesses in Tonga with a loss of jobs and incomes, a statement from the Tonga Chamber of Commerce and Industry revealed today.
A survey completed by the TCCI back in June, found that 16% of businesses were considering closing their businesses temporarily or permanently, while 61% were planning to dismiss or had dismissed more than 41% of their workforce for a start.
“Tonga Chamber expects the negative impacts on enterprises from CoViD-19 will worsen further when/after CoViD-19 arrives in Tonga,” it stated on releasing the results of its survey.
The needs assessment survey to identify key challenges faced by businesses in Tonga resulting from CoViD-19 restrictions, was conducted in collaboration with the International Labour Organisation (ILO).
The survey was completed by 216 businesses in Tongatapu, Vava‘u, Ha‘apai and ‘Eua across 17 sectors, including hotel and tourism (28%), food and beverage/restaurants (21%), and retail and sales (12%). Enterprises surveyed employed up to 250 workers in their businesses, with most employing between 1-10 workers. Only 49% of businesses were still operating fully on site.
Key findings included:
- Of total enterprises surveyed, 15% (32) have stopped operating due to COVID-19, 35% (76) are partially operating, 1% are operating remotely and 49% (106) are fully operating on site.
- 61% of enterprises have dismissed or planned to dismiss more than 41% of their workforce.
- 34% of enterprises stated that "cash flow” was inadequate, plus 40% reported that customers and/or clients have been affected and demand was lower than normal.
- 57% of enterprises did not have their own funding or access to alternative sources of funding to maintain operations and staffing levels. Among enterprises that reported having their own funding, 85% said this funding was not a sufficient amount.
- Lastly 51% of business owners estimated that it would take between 91 and 181+ days to fully restore operations, and 16% of business owners were considering closing either temporarily or permanently.
The Chamber presented its survey to the Legislative Assembly, Standing Committee for Social Services on 18 June 2020.
“Chamber recognizes it must work more effectively and well with government and its other key partners, in order to assist enterprises throughout Tonga overcome COVID-19 negative impacts now and in the future,” it stated.