Despite about N3 trillion interventions by the Central Bank of Nigeria (CBN) and the Federal Government, 73 percent of businesses in Nigeria reported that they were faced with cash crunches in 2020 following covid-19 lockdowns.
However, 57 percent of businesses were able to maintain their staff strength during the pandemic.
Many businesses, particularly informal ones, also reported poor access to credit and capital to sustain their enterprises, including difficulty paying fixed costs like rent.
Many business owners have had to rely on personal savings or leverage support from families and social networks in order to sustain their businesses.
The necessity of ensuring access to cheap credit or loans and possibly targeted funds to support enterprises in struggling sectors is further highlighted through the results.
In addition, 43 percent of the 3,000 businesses from formal and informal sectors surveyed shed 20 percent of their full-time workforce.
A new report released on Tuesday by the United Nations Development Programme (UNDP) and the National Bureau of Statistics (NBS) says while there have been promising signs of recovery this year, 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.
According to the report titled: The Impact of COVID-19 on Business Enterprises in Nigeria, also 81 percent of the enterprises disclosed that they experienced a decline in revenue due to secondary impacts of COVID-19 in 2020.
Median loss in revenue reported remained at 44 percent, in comparison to 2019 revenues.
Also, one-third of the businesses indicated that they know of businesses that have permanently closed due to operational challenges resulting from the pandemic.
Furthermore, almost 60 percent of enterprises experienced an increase in operational costs with the price of raw materials and logistics being the top two contributors to this increase.
Against the backdrop of a decline in production of goods and services and an increase in operational costs, 55 percent of business enterprises were utilising less than 60 percent of their capacity.
To counter the impact of containment measures on operations, 77 percent of business enterprises reported that they either reduced working hours, or either temporarily or permanently had to lay off workers.
The findings also reveal a level of uncertainty plaguing enterprises around the country with 61 percent of enterprises expressing low confidence in relation to outlook on the future, where their perception of their capacity to operate uninterrupted, under the current circumstances, was less than one year.
Nonetheless, “the utilities and agriculture sectors emerged as relatively less impacted and some enterprises even reported gains compared to those in the transport and mining and quarrying sectors, for instance.
“The survey also elucidates the dynamics behind the increase in the national unemployment rate from 27 percent in Q2 2020 to 33 percent in Q4 of 2020, as reported by the National Bureau of Statistics.
“A small minority of enterprises, however, either registered gains or proved to be more resilient across the various facets and elements of business activity that the survey investigated.”
YOU SHOULD NOT MISS THESE HEADLINES FROM NIGERIAN TRIBUNE
We Have Not Had Water Supply In Months ― Abeokuta Residents
In spite of the huge investment in the water sector by the government and international organisations, water scarcity has grown to become a perennial nightmare for residents of Abeokuta, the Ogun State capital. This report x-rays the lives and experiences of residents in getting clean, potable and affordable water amidst the surge of COVID-19 cases in the state.
and then