20% of fully employed Nigerians lost their jobs during the covid pandemic lockdown of 2020, showing the economic impact of the pandemic on Africa’s largest economy.
This 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), on Tuesday, in Abuja.
The report revealed the impact of the pandemic on Nigeria’s business climate, as SMEs faced a harsh economic environment, citing interviews with almost 3,000 businesses from both the formal and informal sector across major industries of the economy. It added that 81% of companies interviewed experienced a decline in revenue, while 73% highlighted liquidity and cash constraints, according to the News Agency of 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,” they said.
“Close to 60 % 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 stated.
One in three business enterprises surveyed indicated that they knew of businesses that had permanently closed due to operational challenges resulting from the pandemic. Data also reveals that businesses were likely to continue experiencing the impact of the pandemic even after the easing of public health measures.
“74% of enterprises still reported a decrease in production levels when compared to the same time in 2019, and 19% of enterprises surveyed revealed revenue increase with most respondents in the utilities sector, while financial and insurance and human and health services sectors registered revenue gains over the same period compared to the previous year.
“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,” the report said.
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.
“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 on 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,” Simon Harry said.
Nigeria’s unemployment rate as of the end of 2020 rose to 33.3% from 27.1% recorded as of Q2 2020, indicating that about 23,187,389 (23.2 million) Nigerians remained unemployed.