A new report by the United Nations Development Programme (UNDP) Nigeria and the National Bureau of Statistics, released on Tuesday, said about 20 per cent of Nigeria’s full-time workforce lost employment during the COVID-19 pandemic in 2020.
The report, which assesses the impact of COVID-19 on business enterprises in Nigeria, is based on in-depth interviews with almost 3,000 businesses from both the formal and informal sectors and across major industries of the economy.
While there have been promising signs of recovery this year, COVID-19 has had an outsized socio-economic impact on Nigeria. From disruptions in supply chains, to ongoing supply and demand shocks and a drop in consumer confidence. These challenges are expected to leave a lasting impact on the businesses and enterprises that make up the backbone of the economy.
The report titled ‘The Impact of COVID-19 on Business Enterprises in Nigeria’ also highlights the significant decline in revenue faced by enterprises and establishments across the country as a result of the pandemic.
Some of the highlights of the report are that 81 per cent of enterprise owners interviewed experienced a decline in revenue while 73 per cent stated that they faced liquidity challenges due to secondary impacts of the pandemic in the year under review. The median loss in revenue reported stood at 44 per cent, in comparison to 2019 revenues.
Also, about 60 per cent of enterprises surveyed experienced an increase in operational costs with the price of raw materials and logistics being the top two contributors to this increase.
Other operational challenges included access to credit and capital, high expenditure on utilities and the lack of an adequate social safety net, especially for informal enterprises.
In addition, the report reflected that one in three business entrepreneurs surveyed indicated that they knew of businesses that had permanently closed due to operational challenges resulting from the pandemic offering a glimpse into a more far-reaching toll than that which can be gleaned purely from the results of this survey.
Speaking during the formal launch of the report at the NBS Headquarters in Abuja, the Statistician-General of the Federation, Dr. Simon Harry, highlighted the importance of the survey results to the nation’s economic development as the data generated during the survey could be used to guide entrepreneurs on how to mitigate the impact of such occurrences, if any, on their businesses in the future.
He said: “As the economy begins to show signs of gradual growth, this report contains important information that can guide policy makers in their interventions to mitigate the negative socioeconomic impacts of COVID-19 in the country.
“I wish to thank UNDP for collaborating with the National Bureau of Statistics on this important report and I urge other development partners to emulate this worthy endeavour by partnering with the Bureau in matters relating to data generated in the country”, Statistician-General added.
In his remarks, the UNDP Resident Representative, Mr. Mohamed Yahya, said: “Although the report findings highlight the complex challenges the economy continues to face because of COVID-19, it also tells a powerful story of innovation, resilience and strength as Nigerian businesses leverage their ingenuity to adjust to this new normal.
“As Nigeria mobilises to recover from the devastating health and socio-economic impact of the pandemic, this report will be a critical tool in informing targeted policy making and programme interventions for both medium and long-term planning as the country rebuilds”, Yahya stressed.
Further analysis of the report’s data showed that Nigerian businesses were likely to continue experiencing the impact of the pandemic even after the easing of public health measures. For instance, despite reduced restrictions at the time of the interviews, 74 per cent of enterprises still reported a decrease in production levels when compared to the same time in 2019.
Some quick facts from the report revealed that 80 per cent of enterprises reported experienced a decrease in production with a majority reporting a decline in production between 21 per cent to 60 percent; and against the backdrop of a decline in production of goods and services and an increase in operational costs, 55 per cent of business enterprises were utilising less than 60 per cent of their capacity.