A new report released on Tuesday by the United Nations Development Programme (UNDP) Nigeria; and the National Bureau of Statistics (NBS), said that 20 per cent of the fulltime workforce in Nigeria lost their jobs 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 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 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.
It stated that 81 per cent of enterprises interviewed experienced a decline in revenue while 73 percent stated that they faced liquidity challenges due to secondary impacts of COVID-19 in 2020.
The report stated that 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 showed that one in three business enterprises surveyed indicated that they know of businesses that have permanently closed due to operational challenges resulting from the pandemic.
The Statistician General of the Federation, Dr. Simon Harry highlighted the importance of the survey results saying that “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.”
The UNDP Resident Representative Mr. Mohamed Yahya said that 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.
He added, “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 policymaking and programme interventions for both medium and long-term planning as the country rebuilds.”
Data from the report suggests that businesses are likely to continue experiencing the impact of the pandemic even after the easing of public health measures.
Despite reduced restrictions at the time of the interviews, 74 percent of enterprises still reported a decrease in production levels when compared to the same time in 2019.