Following the first confirmed cases of COVID-19 pandemic in mid-March 2020, the Ethiopia government imposed stringent measures to combat the spread of the virus including borderland control measures, travel restrictions, social distancing measures, and lockdowns. This article assesses the impact of the pandemic on small-scale manufacturing enterprises in Ethiopia. We conducted a survey of 627 randomly selected small-scale manufacturing firms in different parts of Ethiopia. The large majority of firms remain operational during the COVID-19 pandemic. However, over 95% of firms have experienced a decline in sales revenue, by 55% on average, in September 2020 compared with the same period in the previous fiscal year. Similarly, firms have laid-off employees during the COVID-19 pandemic. Loss of customers due to mobility restrictions is reported as the biggest business challenge during the pandemic. Firms indicate that business loans are the most appropriate policy response to mitigate the negative impact of the pandemic on their business. Lastly, we find that business owners' expectation about recovery and the future is bleak, almost 87% of firms expected a reduction in their sales revenue for the next 30 days compared to their sales revenue in the same period of last year.
