THE IMPACT OF INFECTIOUS EPIDEMIC ON SMALL AND MEDIUM

SCALE ENTERPRISES IN NIGERIA A CASE STUDY OF

CORONAVIRUS DISEASE
ABSTRACT

This research work empirically explored the impact of infectious epidemic on

small and medium scale business enterprises in Nigeria a case study of corona

virus disease. The objectives of this study were to examine the level of coronavirus

disease in Nigeria, investigate the impact of coronavirus disease on the survival of

small and medium scale enterprises in Nigeria. The scope of the study is business

owners in Nigeria, The infectious disease transmission mechanism theory was used

as a framework. The research design used for this study is survey, the population

targeted for this study consists of all business owners across the country. 400

business owners were used as sample size and cluster sampling technique was

applied. Instrument used for this study is the questionnaire. Data collected were

collected from primary sources. From the analysis of the data, the findings shows

that the level of coronavirus disease in Nigeria as compared to other countries is

average, coronavirus disease has effect on the survival of small and medium scale

enterprises in Nigeria. Following the findings, it was recommended that measures

should be devised to curb the spread of the virus and vaccine created so as to

prevent further hinge on the smooth operations of small and medium scale business

activities, business owners should devise a means to continue their business by

taking it online. The study concludes that coronavirus disease has a negative effect

on small and medium scale business enterprises.

 CHAPTER ONE

INTRODUCTION

1.1Background of the study

Development of small and medium scale enterprises has been a focal point of the

various governments of the world, because SMEs have flexible configurations and

immensely contributed to nation building respectively (Aderemi et al. 2019;

Tehseen & Ramayah, 2015; Kayadibi et al., 2013; Khalique et al., 2011).

Generally, the World Bank classified SMEs as businesses with maximum of 300

workers.

Meanwhile, in Nigeria`s context, small and medium scale enterprises are

conceptualized as business entities that have less than 50 employees. Basically,

these enterprises possess investment in machinery and equipment that is less or

equal to six hundred thousand naira and independently owned and operated with a

view to generating job opportunities and meeting sales standard (CBN, 2018).

These business entities constituted about 90% of businesses in Nigeria (Gbandi &

Amissah, 2014). National Bureau of Statistics (NBS) estimated numbers of SMEs

in Nigeria to be 41.4 million. The unique nature of SMEs lies in the utilization of

raw materials from local sources, creation of employment, motivation for rural
development, entrepreneurship development, mobilization of local savings and

platform for self-employment.

However, devastating effects of COVID-19 pandemic on both human and material

resources in early 2020 cannot be forgotten in a hurry. The Wuhan-COVID-19

emerged in 2019 in China like the way Ebola did in West Africa in 2014. But,

COVID-19 resulted into global pandemic- which spread across the globe without

obstruction (WHO, 2020). This novel virus sparked off various restrictions to

movement of people, goods and services. The closure of factories alongside

reduction in production was not left out due to the stay-indoors orders. This

invariably reverberated its effect to activities of SMEs globally.

In the recent time, the novel COVID-19 has motivated research from different

fields, ranging from medical, pharmaceuticals, economic, political and social arena

in conceptualizing possible multiplier effects of COVID-19 on the global

economy. Small and medium-sized enterprises (SMES) are backbone of

developing economies. In Nigeria, SMEs have been identified as the drivers of the

economy due to their capacity to stimulate productivity, provide employment

opportunities and improve welfare of the people (Abosede & Onakoya, 2013;

Ariyo, 2005). This is one of the reasons why studies about impact of COVID-19 on

SMEs in Nigerian cannot be ignored in the phase of a global pandemic.

As the global economy is currently being ravaged by the COVID-19 pandemic, its

aftermath effects on both human and material resources in the world is an

undeniable evidence that good health is the driving force behind the growth of

economy (Meer et al., 2003; Bloom and Canning, 2000). COVID-19 has brought

diverse risks to various economic activities like global financial crisis of 2008

(Dang and Nguyen, 2020). No single country is exonerated from the devastating

effects of this novel virus on human and economy, due to the current era of

globalization. Meanwhile, Nigeria as the biggest country in Africa in terms of

population and economy, has reported 8344 cases of COVID-19, and 246 fatalities

as of May 27th. In order to contain further spread of this virus, the government

implemented a series of measures ranging from the closure of borders against other

nations. Consequently, in March 29th, the government declared a lockdown in

three major states, Lagos, Ogun and Federal Capital Territory, Abuja – halting all

non-essential activities across these states. Later, other remaining states went on

lockdown with a ban on interstate movement on non-essential duties.

In the recent times, various analysts have projected fall in aggregate demand and

supply, dwindling in exports and rise government expenditure as the negative

ripple effects of lockdown across different sectors of the Nigerian economy.

However, this lockdown is more likely to make the situation dire for SMEs in the

country. SMEs constitutes the larger bulk of businesses in Nigeria. According to

National Bureau of Statistics (NBS), SMEs were estimated to be 41.4 million

enterprises in Nigeria which provided jobs for over 70% of working population in

the country (ILO, 2017).

This shows that huge number of people are engaged either directly or indirectly in

SMEs. Therefore, any negative economic shocks reverberated by COVID-19

pandemic on these enterprises make over 70% of the Nigerian working population

vulnerable to the novel virus.in view of the above, this study aims to examine the

aftermath effects of COVID-19 pandemic on Small and Medium Enterprises

(SMEs) in Nigeria. The study raised this specific research questions in addressing

its objective. What are the effects of COVID-19 pandemic on operations of SMEs

in Nigeria? Therefore, considering the contribution of the small and medium

enterprises to the employment generation and economic growth of the Nigerian

economy, and the inevitable threats and shocks of COVID-19 to the all sectors of

the economy, especially SMEs. This study tends to contribute to knowledge by

examining how COVID-19 pandemic affected SMEs in Nigeria with a view to

identifying the mitigating factors that can ensure the sustainability of the

enterprises in post COVID-19 period.

1.2Problem statement
The Corona Virus (Covid-19) has a wide-reaching effect on micro and small

business, consumption technology, travel, and the economy. It has already taken

the lives of many and is also taking. In addition to this, every country follows the

lockdown procedures as a means of preventing measures and Nigeria has also

adopted the same (Ashikul, 2020). It seems both private and the public sector are

messed up due to this virus. The fact is unavoidable that the effect of the novel

corona virus will have a significant effect on the country, economy, and society.

The increasing threat of novel corona virus is a public health crisis and hampers

the macro economy as a whole. It has also cut off the supply chain of the business.

The production and the manufacturers are expected to be hampered more. China is

the central manufacturing hub for both small and medium businesses globally.

Therefore, any disruption in china’s output will simply have repercussions in all

forms of business but local and the international. Mohammad (2020). This is a

major problem for Nigeria SMEs as supply from China was cut off once the

pandemic began.

1.3Research objectives

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.
i. To determine the effect of COVID-19 pandemic on small businesses in

Nigeria

ii. To examine the negative effect of the lockdown policy on the small business

performance.

iii. To assess the impact of coronavirus on the operations of SMEs

1.4Research questions

i. What is the effect of COVID-19 on small businesses in Nigeria?

ii. What negative factor affecting SMEs arose as a result of the lockdown

policy?

iii. What is the effect of the coronavirus on the operations of SMEs?

1.5 Research Hypothesis

 Small businesses in Nigeria were affected by COVID-19

 The lockdown gave rise to negative factors which affected SMEs in Nigeria

 Coronavirus affected the operations of SMEs

1.6 Scope and limitation of the study

This study which is titled the impact of infectious epidemic on small and medium

scale enterprises in Nigeria is focused on assessing the effect of coronavirus on

SMEs. This study was focused on the effect of this pandemic on the essential
commodities: drugs, food and oil. The study was limited to Osun state. The

researcher was limited by time majorly during the course of this research.

1.7 Definition of terms

Coronavirus: Coronavirus disease (COVID-19) is an infectious disease caused by

a newly discovered coronavirus. The virus that causes COVID-19 is mainly

transmitted through droplets generated when an infected person coughs, sneezes,

or exhales. These droplets are too heavy to hang in the air, and quickly fall on

floors or surfaces.

Epidemic: An epidemic is the rapid spread of disease to a large number of people

in a given population within a short period of time. For example, in meningococcal

infections, an attack rate in excess of 15 cases per 100,000 people for two

consecutive weeks is considered an epidemic.

SMEs: Small and medium-sized enterprises (SMEs) or small and medium-sized

businesses (SMBs) are businesses whose personnel numbers are more than 30 and

below 250.
 CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 Origin of Corona Virus (COVID-19)

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).

2.2 CORONAVIRUS (COVID-19)

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).

Figure 1: Distribution of COVID-19 cases worldwide, as of 16 May 2020

Source: European Centre for Disease Prevention and Control (2020).

2.3 TREND OF COVID 19 IN AFRICA (An Africa Experience)

The COVID-19 pandemic was confirmed to have spread to Africa on 14 February

2020. The first confirmed case was in Egypt and the first confirmed case in sub-

Saharan Africa was in Nigeria. Most of the identified imported cases have arrived

from Europe and the United States rather than from China. Most of the reported

cases are from four countries: South Africa, Morocco, Egypt and Algeria, but it is

believed that there is widespread under-reporting in other African countries with

less developed healthcare systems.

Experts have worried about COVID-19 spreading to Africa, because many of the

healthcare systems on the continent are inadequate, having problems such as lack

of equipment, lack of funding, insufficient training of healthcare workers, and

inefficient data transmission. It was feared that the pandemic could be difficult to

keep under control in Africa, and could cause huge economic problems if it spread

widely. As of April 18, 2020, the supply of ventilators is low in much of Africa: 41

countries have only 2,000 ventilators between them, and ten countries have no

ventilators at all. Even basic supplies like soap and water are subject to shortages

in parts of the continent

Figure 2: Total cases and deaths from COVID-19 in Africa as of March 17,

2020

2.4 COVID 19 REPORTS IN NIGERIA (Nigeria experience)

The first confirmed case relating to the COVID-19 pandemic in Nigeria was

announced on 27 February 2020, when an Italian citizen in Lagos tested positive

for the virus, caused by SARSCoV-2. On 9 March 2020, a second case of the virus

was reported in Ewekoro, Ogun State, a Nigerian citizen who had contact with the

Italian citizen On 28 January 2020, the Federal government of Nigeria assured

citizens of the country of its readiness to strengthen surveillance at five

international airports in the country to prevent the spread of corona virus. The

government announced the airports as Enugu, Lagos, Rivers, Kano and the FCT.

The Nigeria Centre for Disease Control also announced the same day that they had

already set up corona virus group and was ready to activate its incident system if

any case emerged in Nigeria.

On 31 January 2020, following the developments of COVID-19 pandemic in

mainland China and other countries worldwide, the federal government of Nigeria

set up a Corona virus Preparedness Group to mitigate the impact of the virus if it

eventually spreads to the country. On the same day, the World Health Organization

listed Nigeria among other 13 African countries identified as high-risk for the

spread of the virus.

On 26 February 2020, a Chinese citizen presented himself to the Lagos State

government on suspicion of being infected with corona virus. He was admitted at

Reddington Hospital and was released the following day after testing negative but

today the reports of those tested positive and died have increased. The coronavirus
then spread to other citizens in Lagos and to other parts of the country. Some

reported cases are shown in the table below:

2.5 COVID-19 SITUATION REPORT SITUATION REPORT

Sunday, 17th May 2020

Active Cases

3,973

Discharged Cases

1,472

Discharged Cases

1,472

Confirmed Cases by State

States No. of Cases (Lab No. of Cases (on No. No. of

Affected Confirmed) admission) Discharged Deaths

Lagos 2,373 1,796 541 36

Kano 761 633 93 35

FCT 397 282 108 7

Katsina 239 198 29 12

Bauchi 212 140 69 3

Borno 212 144 46 22

States No. of Cases (Lab No. of Cases (on No. No. of

Affected Confirmed) admission) Discharged Deaths

Jigawa 197 135 59 3

Ogun 145 73 67 5

Kaduna 138 80 55 3

Gombe 124 32 90 2

Sokoto 112 46 53 13

Oyo 107 77 28 2

Edo 95 55 35 5

Zamfara 74 35 34 5

Kwara 58 45 12 1

Osun 42 7 31 4

Rivers 35 11 21 3

Yobe 32 28 3 1

Nasarawa 31 25 5 1
Kebbi 31 10 17 4

Delta 25 12 9 4

Niger 22 19 2 1

Plateau 21 17 4 0

Adamawa 21 10 11 0

Ekiti 19 5 13 1

Ondo 19 6 12 1

Taraba 17 16 1 0

States No. of Cases (Lab No. of Cases (on No. No. of

Affected Confirmed) admission) Discharged Deaths

Akwa
16 2 12
Ibom 2

Enugu 12 10 2 0

Ebonyi 9 8 1 0

Imo 7 5 2 0

Bayelsa 6 1 5 0

Benue 5 5 0 0

Anambra 5 4 1 0
Abia 2 1 1 0

Sources: www.covid19.ncdc.gov.ng

Sources: www.covid19.ncdc.gov.ng

2.6 SMALL BUSINESS AND COVID 19 IN NIGERIA

There is hardly any unique, universally accepted definition of small scale business

because the classification of business into a small and large scale is a subjective

judgment (Ekpeyong & Nyang, 1992). Egbugu (2003) noted that definitions of

SME’s vary both between countries and between continents. The major criteria

used in the definitions according to Carpenter (2003) could include various

combinations of the following; numbers of employees, financial strength, sales

value, Relative size, Initial Capital outlay and types of industry.

The COVID-19 outbreak, which has been spreading rapidly, has come with a

devastating global impact. This corona virus pandemic has become a global threat,
increasing from 197,590 infections and 7,954 deaths on March 17, 2020, to

2,350,075 infections and 161,270 deaths as at April 19, 2020—barely a month.

The bid to curtail the spread of the coronavirus disease has led to lockdowns and

travel restrictions across countries globally, with Nigeria also being affected.

The lockdown directives have led to the shutdown of many businesses, especially

those that cannot be performed from homes. Only businesses proffering essential

services have been exempted from the lockdown directive; hence, the nation’s

economy is adversely affected. The COVID-19 induced-lock-down is taking a toll

on economic activity and particularly the Small and Medium Enterprises in

Nigeria. Muda (2020).

The Corona virus (COVID-19) pandemic has resulted in disruptions to global

supply chains, a sharp drop in global crude oil prices, turmoil in global stock and

financial markets, massive cancellation of sporting and entertainment events, and

intercontinental travel bans/restrictions across critical air, land and sea routes

around the world. Across Africa, governments of African countries such as Nigeria

are taking proactive steps to constrain the spread of the virus by instituting partial

or total lockdown within their jurisdictions. Households and micro, small and

medium enterprises (MSMEs) are prone to be hard hit by the effect of the
pandemic as businesses are literally ground to a halt. SMEs constitute about 90%

of all the businesses in Nigeria.

2.7 EFFECT OF COVID 19 PANDEMIC ON SOME BUSINESSES IN

NIGERIA

a. Start-ups and Small businesses: entrepreneurs are forced to take drastic

steps to remain in business. The preventive measures taken by the

government have left startups as one of the most vulnerable.

b. Trade: This will be negatively impacted, owing to the shutdown of

factories, reduced access to raw materials and commodities due to supply

chain challenges. Trillions of naira worth of trade for both imports and

exports will be lost due to the lockdowns, seaports and border closure. As

China, is crucial to global trade with its current integration in the global

value chain and main supplier and buyers of intermediate inputs, the

disruptions it is dealing with due to the disease will affect trade.

c. Hospitality Industry: It is no secret that the hospitality industry is one of

the sectors that have been hit the hardest by the COVID-19 pandemic, with

many of the employees either out of work or losing hours due to travel

restrictions, the shutdown of businesses, and social distancing. The hotels

have been experiencing very low patronage.

 d. Cinemas and Entertainment: The film and entertainment industry, in

general, has experienced substantial negative impact; movie theatres have

been shut down, art exhibitions, movie premiers and musical concerts have

either been cancelled or postponed. Multi-billion naira worth of deals has

been lost in the sector.

2.8 EFFECT OF COVID 19 ON NIGERIAN COMMERCIAL CITIES

Nigeria has announced a lockdown of three major states, Lagos, Ogun and Abuja,

to curb the corona virus pandemic. Those that will be affected the hardest will be

households that rely on the day to day activities of self-employed individuals for

consumption. Lagos is the country’s major economic centre as well as its financial

capital. Ogun State borders Lagos State to the South and is notable for having a

high concentration of industrial estates and being a major manufacturing hub.

Abuja is the seat of government.

Nigeria is one of many countries to shut down economic activities to prevent the

rapid spread of the corona virus pandemic. Most, especially developed nations,

have implemented economic support measures to mitigate the impact of lockdowns

on their economies.
In his speech to the nation, the Nigerian President Muhammadu Buhari

acknowledged that the restrictions may make it hard for people to feed themselves

and so ―relief materials‖ would be distributed to communities around the states

affected. But the Nigerian government will have to take into account the country’s

peculiar economic circumstances when it implements its mitigating measures. In

particular, it must bear in mind the millions of Nigerian households whose

livelihoods depend on the self-employed and small scale entrepreneurs.

2.9 ECONOMIC CIRCUMSTANCES OF COVID 19 IN NIGERIA

Nigeria has a very high self-employment rate. In terms of occupational proportions

from a household perspective, many research showed that 41.4% of household

members reported being own account self-employment, 26.5% in paid

employment, 2.8% reported that they were employers of labour, 15.7% indicated

that they were unemployed, while 13.6% reported being non-active in the labour

force.

This generally agrees with the figures from the National Bureau of Statistics,

although it should be noted that the unemployment rate in Nigeria has recently

gotten worse and the national unemployment rate doesn’t reflect the situation in

individual states. Adebayo (2020).

Own account self-employment occurs where a self-employed individual essentially

works for himself or herself with no employees. Many may be in this category

because of the scarcity of paid work. This means that the true unemployment figure

might be higher. At least, however, these individuals are engaged in some sort of

economic activity.

Own account self-employed workers and employers usually work in the

agricultural, services, and manufacturing sectors. Some of them have formalized

businesses but a majority of them work in the informal sector. My research also

showed that occupational status had implications for household consumption.

Employers were typically the greatest contributors to household consumption –

anywhere from 12% to 66%.

Paid workers were typically the second-highest contributors to household

consumption especially for wealthier households, while poorer households tended

to rely more on the activities of own account self-employed individuals.

There will be significant consequences for household consumption in the cities that

are under lockdown. Loss of income will be the immediate concern for individuals

who have been contributing to household consumption through their

entrepreneurial activities and engaged in hand-to-mouth self-employment. It will

be hard for such individuals to participate in the lockdown when their households

depend on them for consumption.

2.10 CONTRIBUTIONS OF PRIVATE SECTORS THROUGH

DONATIONS TOWARDS COVID -19 PANDEMIC IN NIGERIA

Monetary contributions to the account set up at the Central Bank of Nigeria (CBN)

under the auspices of the Private Sector Coalition Against COVID-19 (CACOVID)

have hit N15 billion. A statement issued on behalf of the coalition by the Director,

corporate communications, Central Bank of Nigeria, Isaac Okorafor, on

Wednesday, April 1, 2020, listed 37 donors, including individuals, banks and other

corporates.

A breakdown of the contributions showed that the Central Bank of Nigeria and

Aliko Dangote donated N2billion each, while Abdul Samad Rabiu (Bua Sugar

Refinery); Segun Agbaje (GTB); Tony Elumelu (UBA); Oba Otudeko (First

Bank); Jim Ovia (Zenith Bank); Herbert Wigwe (Access Bank) and Femi Otedola

of Amperion Power Distribution donated N1 Billion each to the relief fund.

Other donors include Pacific Holding Ltd, Union Bank Plc, Sterling Bank Plc,

Standard Chartered Bank, Stanbic IBTC, Citi Bank Nigeria Ltd, FCMB, Fidelity

Bank, ECOBank, African Steel Mills and Multichoice Nigeria Limited.

The statement listed others as FSDH Merchant Bank, FBN Merchant Bank, Rand

Merchant

Bank, Coronation Merchant Bank, Sun Trust Bank, Providus Bank, Wema Bank,

Unity Bank, Heritage Bank, Nova Merchant Bank, Polaris Bank, and Keystone

Bank.

Globus Bank, Titan Trust Bank, Takagro Chemicals Ltd, Ahmadu Mahmoud and

Handy Capital Ltd make up the list of those that have so far made contributions to

the Private Sector Coalition Against COVID-19 (CACOVID) Relief Fund

domiciled at the CBN.

Okorafor noted that the coalition was full of appreciation to the list of good-

spirited individuals and corporate bodies for hearkening to the clarion call

championed by the CBN and the private sector, He, however urged more Nigerians

and corporate bodies to key into the coalition to support the fight against the

pandemic, stressing that Nigeria could overcome the scourge with all hands on

deck. Cynthia (2020)

Conceptual Framework

LOCK DOWN POLICY

SMALL
BUSINESS
CORONA VIRUS

(COVID -19)

Source: Adopted from Hammed (2020)

 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 RESEARCH DESIGN

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.

3.2 RESEARCH POPULATION

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.

3.3 SAMPLING

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.

The researcher adopted simple random sampling techniques to select (115) small

scale businesses as the respondents. The sample size selected by the researcher for
executing the survey process is 115 respondents. These respondents are helping the

researcher in gathering the data related to the Effect of global Pandemic virus

COVID -19 small scale business in Nigeria.

3.4 Data Collection Method

Structured questionnaires were used to collected relevant data from the research

participants. The researcher developed a structured questionnaire containing

several questions pertaining to the three specific research objectives of the study.

To make the instrument easy to respond to and to avert respondent fatigue, the

researcher ensured that the data collection tool short enough to allow respondents

to respond faster to questions and long enough to ensure that all the relevant data is

collected.

3.5 Research Procedure

After ascertaining that the survey was possible and that the data collection

instrument was appropriate, the researcher proceeded to collect the relevant data

from the research participants. Using a predetermined strategy, as defined under

the sampling technique, the researcher visited, called or email the respondents and

to administer the questionnaire to them. The researcher accorded the respondents

between 15 and 25 minutes to fill in the questionnaire should their agree to take

part in the survey.

After obtaining the required data volume, the researcher then coded the data

collection instruments and entered the data into the SPSS. Transformation of the

data was essential as it permitted the researcher to change the data into a more

sensible form. The researcher then proceeded with data analysis after all the data

are entered into the SPSS.

3.6 Data Analysis Method

The study used both descriptive and inferential statistics to analyze the data

obtained from the survey. According to Creswell (2014), descriptive statistics

refers to the use of visually recognizable statistics including, bar graphs, frequency

tables, pie charts as well as column bar graphs. The inferential statistics imply the

use of complex calculations including Chi-Square tests, correlations, deviations

and cross-tabulations to make deeper sense of the obtained data. The current study

used the Microsoft Excel and Statistical Package for Social Scientists (SPSS) to

generate the descriptive statistics and inferential statistics respectively.

 CHAPTER FOUR

DATA ANALYSIS AND PRESENTATION OF RESULTS

4.1 Section A: Background Information about the Surveyed SMEs

Table 1. Classification of Respondents by Sector/Business

Sector/Business Frequency Percentage Valid Cumulative

(%) % %

Food and 50 43 43 43

Consumables 35 31 31 74

Pharmaceuticals 30 26 26 100

Oil and Gas

Total 115 100.0 100.0

Source: Field Work (2020)

Table 1 shows that 50(43%) of the respondents are SMEs engaging in food and

consumables, 35(31%) are SMEs engaging pharmaceuticals and 30(26%) are

involved in oil and gas. This shows that SMEs in food and consumables dominate

the survey.
Figure 1. Status of Enterprise by Ownership Structure

Source: Field Work (2020)

Figure 1 shows the classification of the SMEs in terms of ownership structure. 46%

of the SMEs identified as sole proprietorship, 30% as partnership, and 15% as

private limited company while 9% as public limited company. This implies that the

majority of businesses in the survey are one man business.

Table 2. Classification of Enterprises (Annual Sales Turnover)

Annual Sales Frequenc Percentag Valid Cumulative

Turnover y e (%) % %

(Naira)

1 million 23 20 20 20

2 million 38 33 33 53

3-5 million 40 35 35 88

6-10 million 11 10 10 98

11million and
above 3 2 2 100

Total 115 100 100

Source: Field Work (2020)

As shown in table 2, the respondents with annual sales turnover of 1 million is

20%. 33% has 2 million turnover, 35% has annual turnover of 3-5 million. 10% has

6-10 million annual turnover, whereas 2% has 11 million and above. This shows

that majority of SMEs in the study have a range of 3 million to 6 million as annual

turnover.

Table 3. Classification of Enterprises (Employment Size)

Employmen Siz Frequenc Percentag Vali Cumulativ

t e y e (%) d% e%

(workers)

1-5 28 24 24 24

6-10 32 28 28 52

11-20 31 27 27 79

21-40 15 13 13 92

41-50 2 2 2 94

51 and 7 6 6 100

above 115 100 100

 Total

Source: Field Work (2020)

Table 3 shows employment capacity of the surveyed SMEs. 24% of the enterprises

has between 1 and 5 employees, 28% has between 6 and 10 employees, 27% has

between 11 and 20 employees, 13% has between 21 and 40 employees, then 2%

has between 41 to 50 employees and 6% has 51 workers and above. This implies

that the majority of the enterprises have a number of workforce between 6 and 20

people.

Figure 2. SMEs’ Market (Within City, National Level or Export)

Source: Field Work (2020)

Figure 2 shows that 85% of the enterprises have target market within Sango-Ota,

11% of the SMEs sell their products and services nationwide while 4% of the

SMEs extend the sales of their products and services beyond the borders of Nigeria

due to the proximity of Sango-Ota/Idi-Oroko to the Republic of Benin.

4.2. Section B: Impact of COVID-19 Pandemic on the Surveyed SMEs

Table 4. Operations Affected due to COVID-19 and Lock down

(Production)

Reduction in Frequency Percentage Vali Cumulative

Production (%) d% %

Not at all 12 10 10 10

To a slight 36 31 31 41

extent 49 43 43 84

To a moderate 6 5 5 89

extent 9 8 8 97

To a 3 3 3 100

considerable 115 100 100

extent

To a great

extent

To an extreme

extent

Total

Source: Field Work (2020)

From table 4, 10% reported that the lockdown due to COVID-19 pandemic has not

reduced their production, 31% claimed that it has reduced it slightly, 43% asserted

that it has reduced it moderately, 5% to a considerable extent, 8% to a great extent

and 3% retorted that it has reduced the production in an extreme manner. This

implies that lockdown due to COVID-19 pandemic has moderately affected

operation SMEs in terms of reduction in production.

Table 5. Operations Affected due to COVID-19 and Lock down (Sales)

Reduction in Frequenc Percentage Valid Cumulative

Sales y (%) % %

Not at all 7 6 6 6

To a slight 39 34 34 40

extent 48 42 42 82

To a moderate 13 11 11 93

extent 6 5 5 98

To a 2 2 2 100

considerable 115

extent

To a great
 extent

To an extreme

extent

Total

Source Field Work (2020)

From table 5, it could be inferred that 6% reported that the lockdown due to

COVID19 pandemic has not reduced their sales, 34% claimed that it has reduced it

slightly, 42% asserted that it has reduced it to a moderate extent, 11% to a

considerable extent, 5% to a great extent and 2% retorted that it has reduced sales

extremely. This implies that majority of the SMEs experienced moderate reduction

in sales due to COVID19 pandemic/lockdown.

Table 6. Operations Affected due to COVID-19 and Lock down (Deliveries)

Reduction in Frequen Percentage Valid Cumulative

Deliveries cy (%) % %

Not at all 2 2 2 2

To a slight 8 7 7 9

extent 7 6 6 15

To a moderate 14 12 12 27

extent 46 40 40 67

To a
 considerable 38 33 33 100

extent 115 100 100

To a great extent

To an extreme

extent

Total

Source: Field Work (2020)

From table 6, it could be inferred that 2% reported that the lockdown due to

COVID19 pandemic has not reduced their deliveries, 7% claimed that it has

reduced it slightly, 6% asserted that it has reduced it to a moderate extent, 12% to a

considerable extent, 40% to a great extent and 33% submitted that it has reduced

sales extremely. This implies that majority of the SMEs experienced a huge

reduction in deliveries due to COVID-19 pandemic/lockdown.

Table 7. Operations Affected due to COVID-19 and Lock down (Contracts)

Reduction in Frequenc Percentage Valid Cumulative

Contracts y (%) % %

Not at all 3 3 3 3

To a slight 2 2 2 5

extent
To a moderate 5 4 4 9

extent 6 5 5 14

To a 65 57 57 71

considerable 34 29 29 100

extent 115 100 100

To a great

extent

To an extreme

extent

Total

Source: Field Work (2020)

3% of respondents in table 7 indicated that the lockdown due to COVID-19

pandemic has not reduced their contracts, 2% reported that it has reduced it

slightly, 4% asserted that it has reduced it to a moderate extent, 5% to a

considerable extent, 57% to a great extent and 29% submitted that it has reduced

sales extremely. This implies that lockdown due to COVID-19 pandemic led to

huge reduction in contracts in majority of the SMEs in the studied area.

4.3 Discussion
The data analysis executed above is illustrating that the negative effect is

established on the micro and small business in Nigeria due to corona virus

(COVID-19). The negative effect is impacting the sales as well as the buying

behavior of the customers. The weakening of the business environment in Nigeria

is seen due to COVID-19. The challenges faced by the owners of micro and small

businesses. The lockdown policy by the government as drastically reduced the

sales volume of the small businesses as a result of the weak purchasing power of

the customers, because lowering of the buying behavior is also lowering the

demand and the supply of goods and services by the offered by the micro and small

businesses. As per the survey processes executed, the situation identified will be

lasting at least two months more. This will be degrading the small business as well

as huge losses will be acquired by the small businesses. Due to this reason, more

negative effect as a result of lock down is established on the small business

presence in the Nigeria market.

 CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

5.1 Conclusion

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.

5.2 Recommendation

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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 APPENDIX

QUSTIONNAIRE

APPENDIX

PART 1: BIOGRAPHICAL INFORMATION

For all questions in this section, please circle the number that best typifies your

response

1. Kindly indicate your gender.

[1] = Male [2] = Female

2. Kindly indicate your age bracket.

[1] = Under 25 Years; [2] = 25 – 35 Years; [3] = 36 – 45

Years;

[4]= 46 – 45 Years; [5] = over 55 Years

3. Kindly indicate your business sector.

[1] = Food and consumables [2] = Pharmaceuticals [3] = Oil and gas

4. What is you’re the status of your enterprise by ownership?

5. What is the classification of you enterprise based on your annual sales?

6. How many employees are in your enterprise?

7. How has COVID-19 affected production?

8. How has COVID-19 affected your sales?

9. How has COVID-19 affected deliveries in your

enterprise?

10. How has COVID-19 affected your contracts?

11.