The United Nations Development Programme (UNDP) and the National Bureau of Statistics (NBS) says 20 per cent of Nigeria’s workforce became unemployed in 2020 due to COVID-19.
In a report released on Tuesday titled, “The Impact of COVID-19 on Business Enterprises in Nigeria,” they highlighted the significant decline in revenue faced by enterprises and establishments across the country as a result of the pandemic.
The 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.
About 81 per cent of enterprises interviewed said they experienced a decline in revenue and 73 per cent said they faced liquidity challenges due to secondary impacts of COVID-19.
The report said 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 a 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 stated.
One in three business enterprises surveyed indicated 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, despite 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.