About 20 percent of full-time staff at formal and informal businesses in Nigeria lost their jobs in the heat of the Covid-19 pandemic in 2020.
The startling figure is from a survey conducted by the United Nations Development Programme (UNDP) in conjunction with the Nigerian Bureau of Statistics (NBS), which studied 2,964 businesses in every state in the country to ascertain the effect of the pandemic between the second and fourth quarters of the year.
The report does not give direct reasons why companies cut down on their workforces, but 59 percent of businesses said the costs of their operations were higher between April and December 2020 compared to the same period in 2019.
Operations costs went up due to increases in the price of raw materials, logistics and transportation, power generation, and the cost of workers’ welfare, the report said. More than a third of the businesses sampled said they knew other businesses that had to shut down permanently because of operational challenges.
Across all sectors from manufacturing and agriculture to financial services, more than 70 percent of businesses reported losing revenue during the pandemic, including every transportation company.
The reported pandemic-induced job losses correspond closely to Nigeria’s unemployment rate, which stood at 29 percent by the second quarter of 2020. The most recent figure is 33 percent, from March, when the NBS last published labour statistics. Only South Africa and Namibia have worse unemployment rates in Africa—and possibly the world—according to a Bloomberg tracker of 82 countries.
Despite the punishing effects of the pandemic, some businesses managed to expand operations through online marketing, and delivery services, according to the report. Some of those surveyed said they hoped that an improvement in fortunes in 2021 would enable them to rehire some of the staff they had to let go of last year.