Distribution of Small and Medium Enterprises During Covid-19 Pandemics in Lagos State
Chapter One
Objective of the study
The objectives of the study are;
- To ascertain the effect of COVID19 pandemics on small and medium enterprises in Lagos state
- To ascertain how did small medium enterprises adjust to the economic disruptions resulting from COVID-19 in Lagos state
- To ascertain the effect of marketing of small and medium enterprises during COVD19 pandemics in Lagos
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Coronavirus Pandemic in Nigeria
On February 27, 2020, Nigeria recorded her first case of the dreaded coronavirus (COVID-19) disease- an Italian citizen who travelled into the country. This reality woke the federal and state government up to protect its citizens. Haven acknowledged the fast rate of morbidity and mortality of the virus in other countries across the globe, their aim was to prevent an outbreak of the disease in the country. Civil societies and government agencies embarked on enlightenments campaigns for good hygiene and social distancing in public places (Olapegba, et al. 2020). Also, the body responsible for disease control in the country – the Nigeria Centre for Disease Control (NCDC), partnered with states governments to trace and track victims and their contact. To further prevent the spread of the virus, the Federal government of Nigeria on March 30, 2020 took a drastic decision to close all national borders and airspace, schools, worship centres and other public centres and placed the Federal Capital Territory (FCT), Lagos and Ogun State on total lockdown for fourteen (14) day (Olapegba, et al. 2020). They later extended this lockdown to May 3, 2020. COVID-19 testing laboratories was set up in Lagos, Irrua in Edo State and the FCT and states government opened isolation centres and imposed a dawn to dust curfews in their territories. These drastic decisions or measures taken by the federal government had negative effects on her citizens and also on the economy. They coerced people to stay at home; businesses and offices were closed, excluding the health care sector and essential goods providers (like food and water). This lead to loss of job across the country accompanied with high crime rates in states on total lockdown (Aifuwa, Musa & Aifuwa, 2020). On the bright side, the decision and measure have yielded a high compliance rate from citizens, as they frequently engage in hand washing, practice social distancing and self-isolation, avoided going to work, schools, or crowded area (Olapegba, et al. 2020). Also, most religious leaders in the country have stopped large gathering, forbade hand shaking, and directed its member to pray at home and use of hand sanitizers (Makinde, Nwogu, Ajaja & Alagbe, 2020; Olatunji, 2020).
Transmission Channels of the Impact of COVID 19 on MSMEs
There are several ways the Coronavirus pandemic affects the economy, especially Small and Medium Enterprises, on both the supply and demand sides. On the supply side, companies experience a reduction in the supply of labour, as workers are unwell or need to look after children or other dependents while schools are closed and movements of people are restricted. Measures to contain the disease by lockdowns and quarantines lead to further and more severe drops in capacity utilization. Furthermore, supply chains are interrupted leading to shortages of parts and intermediate goods. On the demand side, a dramatic and sudden loss of demand and revenue for Small and Medium Enterprises (SMEs) severely affects their ability to function, and/or causes severe liquidity shortages. Furthermore, consumers experience loss of income, fear of contagion and heightened uncertainty, which in turn reduces spending and consumption. These effects are compounded because workers are laid off and firms are not able to pay salaries. Some sectors, such as tourism and transportation, are particularly affected, also contributing to reduced business and consumer confidence. More generally, SMEs are likely to be more vulnerable to ‘social distancing’ than other companies. The impact of the virus could have potential spill-overs into financial markets, with further reduced confidence and a reduction of credit. These various impacts are affecting both larger and smaller firms. However, the effect on SMEs is especially severe, particularly because of higher levels of vulnerability and lower resilience related to their size.
Factors which Make MSMEs Highly Vulnerable to the Impact of COVID-19
There are key factors which make SMES highly vulnerable to the impact of COVID-19. Firstly, they are more labour intensive than other companies and therefore more exposed to disruption, especially when workforces are in quarantine, as is happening in several countries. Secondly, they have thinner liquidity reserves, meaning, they have limited financial alternatives, and mostly rely on support from local banks. In the majority of cases they lack assets that can be disposed of, or that can be used as collateral for new credit lines. These factors make them more vulnerable and exposed to liquidity squeeze, and this results from the fact that SMEs cannot produce and thus cannot sell their own products as desired to their end markets due to the pandemic. However, they still have to pay all their fixed costs, such as the rent, the salaries, taxes, and their suppliers as well.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitute of individuals or elements that are homogeneous in description.
This study was carried to examine distribution of small and medium enterprises during COVID19 pandemics in Lagos using Selected SMEs in Lagos state as case study form the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain distribution of small and medium enterprises during COVID19 pandemics in Lagos
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of distribution of small and medium enterprises during COVID19 pandemics in Lagos
Summary
This study was on distribution of small and medium enterprises during COVID19 pandemics in Lagos. three objectives were raised which included: To ascertain the effect of COVID19 pandemics on small and medium enterprises in Lagos state, to ascertain how did small medium enterprises adjust to the economic disruptions resulting from COVID-19 in Lagos state and to ascertain the effect of marketing of small and medium enterprises during COVD19 pandemics in Lagos. The study adopted a survey research design and conveniently enrolled 80 participants in the study. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from SMEs in Lagos state. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
The reality of Coronavirus disease calls for great measures and strategies to be put in place, for the survival of both humanity and businesses. This study suggested ways SMEs can cope in this era of the Coronavirus pandemic and also proposed a model in which businesses can use to help win the fight against the invisible enemy. We concluded that SMEs can triumph in these turbulent times following the laid down health advice, and we pray the world heals of this pandemic in no distant time.
Recommendation
The following recommendations for the policy makers and all stakeholders in SMEs in Nigeria that: pandemic is still ongoing, a spike reduction in operations and sales of SMEs will metamorphose into cash-trap. This would increase the vulnerability of SMEs in Nigeria to other external shocks. Therefore, the government should set aside emergency fund targeting SMEs in the country. Deferment of taxes or waiver of taxes, lower interest rate could also be embarked on by the appropriate policy makers to make SMEs remain afloat during and after COVID-19 pandemic.
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