A new report published on Tuesday offers a grim assessment of how the COVID-19 pandemic has roiled Nigeria’s economy and had an uneven impact across both the formal and informal sectors.
The report – a joint research effort by the United Nations Development Programme and Nigeria’s National Bureau of Statistics – offers a detailed ledger of the pandemic’s disproportionate socioeconomic fallout on Africa’s most populous nation.
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“Wealthier nations can afford to institute the crippling lockdowns and restrictions necessary at times to arrest the spread of the virus, and to support their populations so they can stay at home in an effort to limit community spread,” said the executive summary of the report. “Many developing countries however were often forced to rely on a mishmash of truncated measures to limit the fallout on populations already living in poverty or who rely on daily work for subsistence.”
Nigeria entered the pandemic on shaky financial footing, thanks to rapidly falling prices for oil – its most lucrative export – and a deteriorating security situation.
Then COVID-19 exploded into a global pandemic, grinding business activity to a halt and gutting oil demand throughout the world.
Nigeria was plunged into its deepest recession in over four decades, which saw its economy shrink by 6.1 percent and 3.6 percent respectively in the final two quarters of 2020.
The report, which surveyed 3,000 businesses across both formal and informal sectors of Nigeria’s economy from urban and rural areas, highlighted the devasting effect the pandemic has had on the nation’s jobless rate.
Already a blistering 27 percent in the second quarter of last year, Nigeria’s unemployment rate climbed to a staggering 33 percent by the fourth quarter of 2020.
“Forty-three percent of the enterprises sampled experienced a decline in the work force,” the report noted, “with around 20 percent of workers in the surveyed enterprises losing their jobs during this period.”
The report found that many businesses, particularly informal ones, said they had difficulty accessing credit and capital to keep their doors open, with many owners having to rely on personal savings, family and social networks to stay afloat.
But the report also highlighted pockets of resilience within Nigeria’s business landscape.
Over half of the businesses surveyed – 57 percent – said they were able to maintain their staffing levels during the pandemic.
A small minority of businesses, such as those that could switch to e-commerce models “either registered gains or proved to be more resilient”.
The report, however, does not see a significant improvement in the labour force, thanks to continued uncertainty surrounding the path of the pandemic and the ongoing struggle to secure enough COVID-19 jabs to inoculate the population.
“This manifested in the expectation among a significant percentage of businesses that the growth of the labour force is likely to remain anaemic, which could have serious consequences for unemployment in the country and necessitates the shoring up of social welfare support,” said the report.