Following the advent of the coronavirus (COVID-19) fresh indication has emerged that about 20 per cent of Nigeria’s full-time workforce lost employment, thus deepening the magnitude of unemployment in the county.
This was disclosed by a report released by the United Nations Development Programme (UNDP) and the National Bureau of Statistics (NBS).
The title “The Impact of COVID-19 on Business Enterprises in Nigeria”, highlights the significant decline in revenue faced by enterprises and establishments across the country as a result of the pandemic.
Meanwhile, a report has projected that the unemployment rate in Nigeria is estimated to reach 32.5 per cent this year.
However, the UNDP/NBS report based its findings on in-depth interviews with almost 3,000 businesses from both the formal and informal sectors across major industries of the economy.
The report said that 81 per cent of enterprises interviewed experienced a decline in revenue and 73 per cent stated that they faced liquidity challenges due to secondary impacts of COVID-19 in 2020.
It added that the median loss in revenue reported remained at 44 per cent, in comparison to 2019 revenues.
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.”
The report also showed that one in three business enterprises surveyed indicated that they knew of businesses that had permanently closed due to operational challenges resulting from the pandemic.
However, data from the report suggests that businesses were likely to continue experiencing the impact of the pandemic even after the easing of public health measures.
It said that in spite of 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.
According to the report, a small minority of businesses, however, reported positive gains during the pandemic.
It said that 19 per cent of enterprises reported increase in revenue with higher proportions of enterprises in the utilities, while financial and insurance and human and health services sectors registered revenue gains over the course of the pandemic, compared to 2019.
“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 policymakers 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 the 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.”