The pandemic has had a profound effect on businesses in Nigeria. While businesses worldwide have been hit hard by the pandemic, some industries have borne the brunt more than others.
These industries include hospitality, manufacturing, and construction, which play a significant role in Nigeria’s economy. This article will discuss how the pandemic has caused chaos in the business community and how the Nigerian government has responded.
An Overview of the Nigerian Economy
Over the past thirty years, the economy of Nigeria has grown to be the largest in the entire African continent. It even surpasses countries in North Africa, which has typically taken the top spots along with South Africa.
This massive increase in economic output can be seen in some of the business-friendly policies put in place by the Nigerian government over the past decade.
As can be seen in publications like PoliticsNigeria.com, it still has plenty of room to grow, especially in services like FinTech and entertainment. Generally speaking, the economy of Nigeria can be classified into several sectors:
- Agriculture: Nigeria’s farm production ranks sixth worldwide and first in Africa. Nearly one-third of the workforce is employed by this sector, which accounts for 18% of GDP. Nigeria also has the largest number of cattle in Africa, making it a large-scale food producer for the continent.
- OIl: Due to its enormous oil and gas reserves, Nigeria is a member of OPEC.
- Services: Nigeria has invested massively in a service-based business and is one of the leading FinTech developers in Africa.
- Mining: As with many African nations, Nigeria sits on top of vast deposits of minerals. Despite being less developed than the oil industry, it still contributes to the nation’s GDP.
- Energy: Aside from its vast oil and gas reserves, Nigeria boasts many hydropower plants and exports some of its surplus power to its neighbours.
- Overseas remittance: Remittances sent home by Nigerians living abroad are a major foreign exchange earner for the country.
How Has Covid Affected Business?
According to a report from UNDP, developing nations like Nigeria have suffered in large part because of the socioeconomic consequences of the pandemic. Moreover, they state that around two-thirds of all operating businesses had to shut their doors to contain the spread of the virus. This had led to massive amounts of unemployment and caused a wide range of issues that the government has found challenging to cope with. This can be seen in falling tax receipts and a decline in output of the largest sectors. Additionally, the number of people who fell into extreme poverty increased drastically, resulting in a set of problems that are difficult to fix.
What Has The Government Done To Assist Struggling Businesses?
Nigeria’s Central Bank has announced several measures to deal with the impact of the virus, including creating a fund to support the economy, including help for small businesses and households. Some of these include:
- Interest rate reductions
- Increasing foreign exchange reserves
- Credit assistance
- Suspending planned increases in energy costs
While most of these measures have helped in some way, many Nigerians still struggle and have found it challenging to reopen businesses closed from lockdown measures.
Nigeria has a large and diverse economy that has helped it remain solvent throughout the pandemic. Nevertheless, the impact on regular citizens and business owners has been profound. Nevertheless, thanks to the measures put in place by the government, Nigeria should be able to emerge more robust than ever before.
Business Post Contributor