Not less than 20 percent of the full-time workforce in Nigeria lost their jobs to COVID-19 pandemic in 2020, United Nations Development Programme (UNDP) report reveals.
Despite the promising signs of recovery from the impacts of COVID-19, the ‘Impact of COVID-19 on Business Enterprises in Nigeria’ report released by the UNDP Nigeria and the National Bureau of Statistics (NBS) on Tuesday shows that businesses still struggle with challenges including disruptions in supply chains, shocks in supply and demand as well as drop in consumer confidence.
These challenges, which have reduced the fortunes of most businesses, according to the report, are expected to remain for a long time.
The report, which highlights the significant decline in revenue faced by enterprises and establishments across the country as a result of the pandemic, shows that about 81 percent 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.
It states that against the backdrop of a decline in production of goods and services and an increase in operational costs, 55 percent of business enterprises engaged less than 60 percent of their capacity. Seventy seven percent of business enterprises reported that they either reduced working hours, or either temporarily or permanently had to lay off workers.
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“Close to 60 percent 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.
“One in three business enterprises surveyed indicated that they know of businesses that have permanently closed due to operational challenges resulting from the pandemic,” it states.
Minority of businesses interviewed however reported positive gains during the pandemic with 19 percent of enterprises reporting an increase in revenue with higher proportions of enterprises in the utilities, financial and insurance and human and health services sectors registered revenue gains over the course of the pandemic, compared with the year before.
Commenting on the report, the Statistician General of the Federation, Simon Harry, says the report is aimed to provide 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, Mohamed Yahya, notes that businesses are likely to continue experiencing the impact of the pandemic even after the easing of public health measures.
“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 policymaking and programme interventions for both medium and long-term planning as the country rebuilds. 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,” he says
