FX RATES
FX RATES

Impact Of Covid 19 On Nigeria Business Enterprise – NBS/UNDP

According to a new statistics mutually released by the United Nations Development Programme and the National Bureau of Statistics, about 20 percent of fully engaged workforce in the Nigerian labor market lost their jobs due to the covid 19 pandemic.

This report was disclosed in a report titled: “The Impact of COVID-19 on Business Enterprises in Nigeria,” by the National Bureau of Statistics (NBS) and United Nations Development Programme (UNDP).

 

The research citing interviews with almost 3,000 businesses from both the formal and informal sector across major industries of the economy stated that vast majority of businesses operating in Nigeria suffered due to the pandemic and the subsequent restrictions imposed on businesses to arrest the spread of infections, including lockdowns, restrictions on movement, and other public health measures. The gravity of lay-offs, reductions in hours of operation, and limited access to credit provide insight into its impact on individuals and families whose ability to maintain their livelihoods and generate income were severely curtailed. However, the effects were felt unequally by business enterprises across the country that belonged to different sectors with notable differences between formal and informal enterprises. At the same time, for a small percentage of enterprises, the pandemic bought about some gains.

Some key facts from data disclosed from this report suggests that  Sixty percent of the enterprises experienced a decrease in
working hours, while 34 percent indicated that their hours of
operation remained the same throughout the pandemic, and
4 percent of the businesses experienced an increase in their
hours of operation for the period.

As businesses tried to adapt and react to the shocks brought about by the pandemic and accompanying public health measures, they experienced great changes in overall operational costs. Among businesses reporting an increase in operational costs, survey results show that “price of raw materials” was the greatest contributor at 45 percent, while “logistics/transportation cost” was responsible for 26 percent, “power generation” for 12 percent, and “workers’ welfare” for 10 percent of the changes in the cost of business operations in Nigeria.

More than one in three of the enterprises sampled indicated that they knew of businesses that permanently closed due to operational challenges resulting from the pandemic. The data is indicative that businesses are likely to continue experiencing the impact of the pandemic for some time even after the easing of public health measures. The time needed for an economic recovery to become manifest, and the extent of the damage to enterprises around the country, are both likely to be greater if the country has to endure more pandemic related shocks, such as a third wave of infections or delays in the procurement and distribution of vaccines.

Just 15 percent of the enterprises expanded either products
and services offered or their sales and distribution channels In the survey responses, businesses that were able to expand during the pandemic said that they primarily did so by including online marketing and delivery services as part of their sales and distribution channels. Differences across the sectors were evident with more formal enterprises employing online marketing while more of the informal enterprises resorted to adding delivery services as part of their operations.

Statistician-General of the Federation, Mr Simon Harry said the survey results contained important information that could guide policymakers to mitigate the negative socio-economic impacts of COVID-19 in the country.

“I wish to thank UNDP for collaborating with NBS 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 generation in the country,” Simon Harry said.

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