The Impact of COVID-19 on SMEs in Nigeria
The aim of this study is to assess impact of corona virus on small and medium scale enterprises. The study was guided by the following minor objectives.
- To determine the effect of COVID-19 pandemic on small businesses in Nigeria
- To examine the negative effect of the lockdown policy on the small business performance.
- To assess the impact of coronavirus on the operations of SMEs.
REVIEW OF RELATED LITERATURE
In the last two decades, the name of china has become common in every country. It has become one of the crucial countries to enhance the economy of the country Meyer (2020). The country plays an immense role in terms of boosting the economy by providing them with great infrastructure. The importance of China in the global economy is not only related to the manufacturer and exporter of the product but also the suppliers of the immediate products for the manufacturing companies Meyer (2020). Globally about 20 per cent of the manufacturing products are produced in China. Therefore, with the rise of COVID 19, the countries are facing an immense issue. Not only China but other countries where their products are imported are equally hampered. As Nigeria is a highly dependable china product therefore, with the rise of this sudden pandemic disease the sales rate of small businesses are hampered just like private and public sector companies of the country. The automotive industry, machinery, and other associated industry are also got affected due to this. The COVID-19 pandemic has forced the retail outlets of the nation to remain closed. Thus situation has identified to be unparalleled disruption of many businesses. When the number of major cities has declared self-isolated, lockdown and following social distancing have directed towards reducing the spread of the virus Adb. (2020).
Corona virus is considered as one of the most infectious diseases which mainly occur after contaminating the human with the rigorous acute syndrome of respiratory issues. Ahmad (2020). The particular disease has been evolved like a pandemic public health crisis because of extensive spread within the number of nations. The pandemic of COVID-19 is accelerating its transition towards digital commerce in a very significant manner Ahmad (2020). The customers of the nation are expected to be practicing social distancing. COVID-19 is identified as an independent variable because the economy of the nation and the world has been influenced significantly. Based on this particular pandemic the people of the nation have imposed a higher level of limitations upon the individuals as well as on the businesses (Mohammad, 2020).
This study employed the descriptive research design to assess the impact of the infectious epidemic on small and medium scale enterprises in Nigeria using coronavirus disease as a case study.
This study was conducted in Osun state. The population for this study was made up of all SMEs within Osun state that trade pharmaceuticals, oil and gas, and food.
Sampling technique is the methods used in drawing samples from a population was driven by the objectives of a given research activity (Robon, 2004; Creswell, 2014). The sampling process was regulated by the parameters in the population in line with specific objectives of the study. The study assumed a simple random sampling approach to give everyone an equal chance of participating in the study since it is an opinionated survey.
DATA ANALYSIS AND PRESENTATION OF RESULTS
Section A: Background Information about the Surveyed SMEs
CONCLUSION AND RECOMMENDATION
This study was carried out with a core objective of investigating the impact of COVID-19 pandemic on selected small and medium enterprises in Nigeria, with a view to ascertaining the impact of lockdown on SMEs engaging in three essentials- food and consumables, pharmaceuticals, oil and gas in Sango-Ota industrial area of Ogun state, Nigeria. COVID-19 has emerged as one of the global pandemic health menaces. Researchers are trying to find out the reasons behind these pandemic diseases. As per china, this pandemic disease can be tackled only when response control strategies and tactics are applied. This pandemic disease is worsening the country’s situation. The country gets hampered both in terms of health and economics. With the effect of corona virus, all the business is hindered which have lower down the economic growth of the country. Data were collected with the administration of structured set of questionnaire on 100 SMEs which were selected purposively. On analyzing the data collected it has found that micro and small businesses are seriously hampered due to this pandemic disease. The country is severely suffering as the number of confirmed cases and the death rate is increasing but in the coming days, the country’s economy has also downturned. It is expected that to return and to enhance the economy like before is much hard. It is also much hard to increase the sales of the micro and small business as a result of the country’s total lockdown policy imposed the federal Government of Nigeria. Findings from the analysis showed that the enterprises experienced moderate reduction in production and sales during the lockdown. The reason why there was no spike in reduction in these operations might have been as a result essential commodities and services in which these enterprises engaged in. However, the surveyed enterprises experienced a spike in reduction of contracts and deliveries. The reason for this finding might have been as a result of total closure of other enterprises engaging in non-essential products and services due to stay at home government`s order.
In view of the above, the study makes 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.
It is further recommended that the government should review the lockdown policy while not contravened with the health guidelines and policy for curbing the COVID- 19 in Nigeria within a very possible short time to enable the country to return to normalcy. More so, researchers must do their research regarding the Covid-19 with every possible outcome because this will help to improve our downturn economy as a result of COVID 19 pandemic to revitalized the performance of our micro and small scale businesses towards self-sustainability and economic growth.
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