Yemen conflict paralyzes economic activity, puts women businesses at risk

Sana’a, 15 November 2015 -- In partnership with SMEPS, UNDP conducted in August 2015 a rapid business assessment in six governorates to examine the impact of the crisis on business activity. The assessment was carried in Sanaa, Hajjah, Sa'ada, Taizz, Aden and Abyan Governorates, providing insights on the extent of damages and loss incurred by the private sector. The business survey will assist local authorities, the private sector and the early recovery cluster partners to provide time-critical assistance to support economic recovery and restoration of micro, small, medium and large enterprises (MSMEs).

The findings revealed that around 26% of businesses were closed since March 2015 due to the ongoing conflict in the surveyed governorates, with as much as 35% of MSMEs engaged in the services sector. Almost all businesses closed during the conflict was due to physical damage; with 77% of closed businesses suffering complete damages, 15.4% partial damages and 7.6% closing for other reasons. Estimated cost of average damage incurred per business is highest in Sa’ada at 35.5 million (YER), followed by Aden at 5 million (YER).

In a male-dominated society, women represented less than one third of the labor force before the conflict. The ongoing crisis has severely affected businesswomen as compared with their male counterparts, with almost half of women-owned enterprises closed since March.

Yemen depends on imports for nine-tenths of its food, with only 15% of the pre-crisis volume of imports is getting through due to severe import restrictions. This has largely affected business activity and flow of goods into the country, with three quarters of businesses struggling to source enough of their regular provisions and supplies. The limited geographical outreach of financial providers and an underdeveloped financial services were also identified by 73% as major constrains to financial access.

The report recommends to invest in business resilience and business continuity initiatives that support enterprises to manage risk, and helps businesses develop crisis mitigation strategies, targeting the most affected business groups namely; youth business owners, businesswomen and MSMEs.

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