According to the United Nations Development Programme (UNDP) and the National Bureau of Statistics (NBS), during the COVID-19 pandemic in 2020, 20% of Nigeria’s full-time workforce lost their jobs.
Both organizations stated this in a recent paper titled “The Impact of COVID-19 on Business Enterprises in Nigeria,” which was released on Tuesday in Abuja.
The pandemic has caused a considerable drop in revenue for businesses and organizations across the country, according to the research.
Its conclusions were based on in-depth interviews with nearly 3,000 enterprises from both the formal and informal sectors across the economy’s major industries.
The report said that while there had been promising signs of recovery in 2021, 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.
“Close to 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.”
According to the report, one out of every three businesses surveyed said they knew of businesses that had permanently shuttered owing to pandemic-related operational issues.
However, the report’s findings suggest that even when public health precautions were eased, companies were likely to continue to feel the effects of the pandemic.
Despite lower constraints at the time of the interviews, 74% of businesses reported lower output levels than at the same time last year, according to the survey.
However, according to the survey, a small percentage of firms saw favorable results throughout the pandemic.
“Mirroring broader global movement towards e-commerce and direct distribution to consumers to reduce health risks and overcome hurdles imposed by pandemic restrictions, 15 per cent of the enterprises expanded either products and services offered or their sales and distribution channels.”
At the unveiling of the report, the Statistician- General of the Federation, Mr Simon Harry said the survey results were very important as they contain important information that could guide policy makers in their interventions to mitigate the negative socio-economic impacts of COVID-19 in the country.
“So, I consider it very important because all of us are aware of the noticeable havoc that COVID-19 has brought on our economy.
“Thus understanding the extent of the impact of the pandemic of business enterprises became very necessary as a way of providing a veritable platform for decision-making process in Nigeria.
“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.”
Mr Mohamed Yahya, the Nigerian UNDP Resident Representative, said that the report findings highlight the complex challenges the economy continues to face because of COVID-19.
He said that it also raises awareness into the ramifications of the pandemic on the business environment in Nigeria, including its impact on production, sales, revenues and the labour force, with details that were far more granular than were normally available and offering critical insight into where interventions should be targeted.
“The findings also present insight into avenues for resilience. The ability of several enterprises to leverage digital infrastructure emerged as a factor of resilience and they highlight the need for increased investment in bridging the digital divide among various communities in the country.
“In spite of the complex challenges enterprises across the country continue to face, the report is also a testament to the strength, innovation and resilience of Nigerian enterprises as they 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.”