The Effect of COVID-19 on Socio-economic Activities in Nigeria

1.0 Introduction

1.1 Background of Study

The outbreak of the novel coronavirus disease (COVID-19) was first reported in Wuhan, China, in December 2019. The virus rapidly spread across the globe, leading the World Health Organization (WHO) to declare it a global pandemic on March 11, 2020 (WHO, 2020). Countries worldwide implemented various containment measures, including lockdowns, travel restrictions, and social distancing guidelines, to curb the spread of the virus. These measures, while necessary for public health, significantly disrupted economic activities, leading to widespread business closures, job losses, and financial instability (International Monetary Fund [IMF], 2020).

In Nigeria, the first confirmed case of COVID-19 was recorded on February 27, 2020, in Lagos State (Nigeria Centre for Disease Control [NCDC], 2020). Following this, the federal government imposed lockdowns in major cities, including Lagos, Abuja, and Ogun State, with later restrictions extending to other parts of the country, including Port Harcourt (Presidential Task Force on COVID-19, 2020). These measures led to an immediate decline in economic productivity, with the National Bureau of Statistics (NBS) reporting that Nigeria's Gross Domestic Product (GDP) contracted by 6.1% in the second quarter of 2020 (NBS, 2020).

The COVID-19 pandemic has had unprecedented effects on global economies, disrupting socio-economic activities and altering business operations worldwide (World Health Organization [WHO], 2020). Nigeria, like many other nations, experienced a severe economic downturn due to the outbreak, with businesses struggling to adapt to lockdown measures, supply chain disruptions, and declining consumer demand (International Monetary Fund [IMF], 2021). The pandemic exposed vulnerabilities in various economic sectors, particularly in cities such as Port Harcourt, where industries ranging from oil and gas to manufacturing and services were severely impacted (World Bank, 2021). Port Harcourt, a major economic hub in Nigeria, is home to numerous businesses and industries that contribute significantly to the country's Gross Domestic Product (GDP). However, the COVID-19 lockdowns and movement restrictions led to a decline in productivity, revenue losses, and job layoffs (National Bureau of Statistics [NBS], 2021). Many companies had to implement remote work strategies, reduce workforce sizes, or temporarily shut down operations to comply with public health directives (United Nations Development Programme [UNDP], 2020). The pandemic also affected consumer spending habits, causing a decline in market demand for goods and services, which further weakened business sustainability.

According to AfDB] (2021), the impact of COVID-19 extended beyond economic losses to include social consequences such as increased poverty, job insecurity, and reduced household incomes (African Development Bank [AfDB], 2021). Small and medium-sized enterprises (SMEs) in Port Harcourt, which are critical to economic growth, faced challenges in accessing financial support and maintaining operational stability during the crisis (Central Bank of Nigeria [CBN], 2021). While some businesses adapted through digital transformation and e-commerce, many others struggled to survive due to limited technological infrastructure and financial constraints.

The COVID-19 pandemic, caused by the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), has significantly impacted socio-economic activities worldwide (World Health Organization [WHO], 2020). In Nigeria, the outbreak of the virus led to major disruptions in economic activities, business operations, and social interactions. The World Bank (2021) reported that the pandemic resulted in an economic contraction of 1.8% in 2020, affecting industries, employment, and overall productivity. The socio-economic impact of COVID-19 in Nigeria was particularly evident in cities like Port Harcourt, a key commercial hub with diverse industries. Companies faced challenges such as supply chain disruptions, reduced consumer demand, and workforce constraints due to government-imposed lockdowns and movement restrictions (International Monetary Fund [IMF], 2020). Therefore, this study aims to examine the effect of COVID-19 on socio-economic activities in Nigeria.

1.2 Statement of Problems

Investigation revealed that many businesses forced to shut down or downsize, unemployment rates in Nigeria surged, leading to widespread financial insecurity and poverty (National Bureau of Statistics [NBS], 2021). In Port Harcourt, where the oil and gas sector is a major economic driver, reduced global demand for crude oil resulted in lower production levels and massive revenue losses, affecting not only corporate profits but also the livelihoods of thousands of workers (African Development Bank, 2021).

Furthermore, many companies experienced delays in sourcing raw materials, increased production costs, and logistical challenges that hindered their ability to meet customer demands (United Nations Development Programme [UNDP], 2020). The informal sector, which forms a substantial part of Nigeria's economy, faced even greater struggles, as most small business owners lacked the financial resilience to cope with the economic downturn (World Health Organization [WHO], 2020). The pandemic exposed the fragility of Nigeria's economic system and highlighted the need for more robust policies to support businesses in times of crisis. It is against the backdrop that this study seeks to address these problems by examining the challenges faced by businesses, the coping mechanisms adopted, and the broader implications for the Nigerian economy.

1.3 Aim and Objectives of Study

The aim of this study is to examine the effect of COVID-19 on socio-economic activities in Nigeria, focusing on selected companies in Port Harcourt.

The specific objectives of the study include:

1. To analyze the impact of COVID-19 on business operations and financial performance of selected companies in Port Harcourt.
2. To examine the extent to which the pandemic affected employment and job security in the selected companies.
3. To evaluate the effectiveness of government intervention programs in supporting businesses during the pandemic.
4. To assess the challenges faced by businesses in adapting to COVID-19-induced disruptions.
5. To identify strategies that businesses have implemented to recover from the economic impact of the pandemic.

1.4 Research Questions

This study seeks to answer the following research questions:

• How has COVID-19 affected the business operations and financial performance of selected companies in Port Harcourt?
• To what extent has the pandemic impacted employment and job security in these companies?
• What are the major challenges businesses faced in adapting to COVID-19-related disruptions?
• How effective have government intervention programs been in supporting businesses during the pandemic?
• What strategies have businesses adopted to recover from the socio-economic impact of COVID-19?

1.5 Research Hypothesis

Based on the stated objectives, the following hypotheses are formulated:

• H₀1: COVID-19 has no significant effect on the business operations and financial performance of selected companies in Port Harcourt.
• H₀2: COVID-19 has significantly affected the business operations and financial performance of selected companies in Port Harcourt.
• H₀3: Businesses in Port Harcourt have faced significant challenges in adapting to COVID-19-related disruptions

1.6 Significance of Study

The outcome of the research findings will be significant to business owners and managers as it will provide insights into the financial and operational challenges businesses faced during COVID-19. It will benefit policymakers and government agencies by evaluating the effectiveness of intervention programs such as financial relief packages, tax incentives, and economic policies.

Furthermore, employees and job seekers will find this study valuable as it will shed light on the impact of COVID-19 on employment stability and job security. It will help labor organizations and human resource professionals develop better workforce management strategies to ensure employee retention and economic sustainability during crises.

Academically, this study will serve as a useful reference for researchers interested in the socio-economic impact of pandemics on developing economies. It will contribute to existing literature on crisis management, business sustainability, and economic resilience, providing a foundation for future research on similar global disruptions.

1.7 Scope of the Study

This study will examine the effect of COVID-19 on socio-economic activities in Nigeria, focusing on selected companies in Port Harcourt, Rivers State. The study will be limited to companies such as the Nigerian Liquefied Natural Gas (NLNG), Indorama Eleme Petrochemicals, and Port Harcourt Electricity Distribution Company (PHED), which represent key sectors affected by the pandemic.

The research will cover the period from 2020 to 2023, providing insights into the short-term and long-term effects of COVID-19 on business operations. Data will be gathered from company reports, employee feedback, and government policy documents to assess the extent of the pandemic's impact.

1.8 Limitations of the Study

During the course of this study, there were some problems encountered which stood as limitations to the research work. Some of the limitations include:

1. Delays from Respondents: Many cooperative members had busy schedules and were unable to respond promptly to surveys and interviews. Some respondents needed repeated follow-ups before providing their inputs, which extended the research timeline beyond the initial plan.
2. Financial Constraints: This limited the ability to expand the study to more cooperatives across different locations. The cost of transportation, printing of questionnaires, and other logistics affected the number of cooperatives that were studied, reducing the diversity of the sample.
3. Time Constraints: Conducting a broader study across multiple states or regions would have required more time for data collection and analysis. The limited timeframe influenced the scope of the study, making it necessary to focus only on selected primary cooperatives in Lagos State, Nigeria.

1.9 Definition of Terms

COVID-19:

COVID-19 is an infectious disease caused by the SARS-CoV-2 virus, which emerged in late 2019 and rapidly spread across the world, leading to a global pandemic (World Health Organization [WHO], 2020). The virus caused significant disruptions in various sectors, including health, economy, and social life, forcing businesses to adopt new survival strategies.

Socio-economic Activities:

Socio-economic activities refer to the interactions and processes that shape both economic productivity and social well-being within a society. These include employment, business operations, trade, education, and social interactions (Gopinath, 2020). The COVID-19 pandemic drastically altered these activities, affecting businesses, employment rates, and overall economic stability.

Business Resilience:

Business resilience is the ability of an organization to adapt and recover from disruptions, such as economic crises, pandemics, or natural disasters, while maintaining essential functions (McKinsey & Company, 2021). Many companies in Nigeria had to develop resilience strategies, including digital transformation and cost-cutting measures, to survive the economic impact of COVID-19.

Lockdown Measures:

Lockdown measures refer to government-imposed restrictions aimed at limiting movement and controlling the spread of infectious diseases (International Monetary Fund [IMF], 2021). During the COVID-19 pandemic, Nigeria implemented lockdowns that led to the temporary closure of businesses, schools, and public spaces, significantly impacting economic activities.