| Nigeria Economy |    1394 VIEWS  |
| Nigeria Economy | |
| 1394 VIEWS | |
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| PROSHARE | |
| PROSHARE | |
Saturday, October 03, 2020 /05:00 PM / by
NBS / Header Image Credit: NBS
Background
In April 2020, the National Bureau of Statistics
(NBS), with support from the World Bank, launched the COVID19 NLPS; a monthly
survey of a nationally representative sample of 1,950 households to monitor the
socioeconomic impact of the pandemic and other shocks. The first round
(baseline) of the survey was conducted in April/ May 2020, during which a
federally mandated lockdown was in full effect. The government began lifting
restrictions in June and by the time the fourth round was conducted between
August 9-24, 2020, there were minimal restrictions on movement within the
country. This brief presents the findings from the fourth round of the Nigeria
COVID-19 National Longitudinal Phone survey (COVID-19 NLPS) conducted in August
2020.
Summary
Access to Basic Services
As the
government continues to ease travel restrictions within the country, most
Nigerians are able to access preventative care, such as prenatal care. About
91% of those households that needed preventative care were able to access it
and almost 95% of those households that needed pre-natal or post-natal care
were able to access it, between mid-March and August 2020.While many schools
were still closed at the time of the survey, 28% of those households with
children who attended school before the pandemic reported that the children in
their households were currently attending school. Of the remaining households,
whose children were not attending school, 95% reported that the children are
planning to go to school when they reopen. Many of those attending school are
in transition grades and were taking exams during the period.
Credit
The
pandemic continues to affect the livelihoods of Nigerian households and many
have had to take out loans to meet their current obligations. About 1 in 4
households were already indebted prior to the pandemic while nearly one third
have taken out new loans since the onset of the pandemic. Poorer households
were more likely than richer households to have loans taken before the start of
the pandemic that they were still repaying be repaying. However, the opposite
occurs with new loans, with households in the higher quintiles being more
likely to have taken new loans than poorer households. This shows that the
pandemic has impacted the finances (and livelihoods) of households across the
whole income distribution, and not only the most vulnerable.
Loans
taken since mid-March have been predominately informal in nature, with over 55%
being obtained from friends or relatives. Loans obtained from more formal
sources were far less frequent with only 9% of respondents reporting loans
obtained from banks and microfinance institutions and 16% from cooperative and
savings associations. This could reflect barriers faced by Nigerian households
to obtain formal loans in the face of a crisis and that many households instead
must turn to friends and relatives for loans.
Just as
with loans taken before the pandemic, new loans were primarily used to pay for
food items and, farm and non-farm business inputs. However, there are also some
important differences in the purposes for which loans were taken before and
after the start of the pandemic. About 51% of households that obtained loans
after the pandemic began used these loans for purchasing food, compared with
41% of households with existing loans, indicating that loans taken since the
start of the pandemic were used more to sustain households’ basic needs. There
was no difference in the share of loans taken to pay for health expenses
comparing loans taken before and after the pandemic, but the share of loans
being used for education expenses was substantially reduced, either due to the
timing of the survey (at the end of the school year) or due to most schools
being closed as part of the mitigation efforts by the government. A substantial
share of households with both new and existing loans are concerned about
repayment, with more than 70% of households reporting that they are either very
worried or somewhat worried about being able to repay their loans.
Employment and Livelihood
The
share of people who are working has continued to creep back up to pre-crisis
levels. This trend demonstrates that the government's loosening of the
restrictions has enabled Nigerians to return to work. The share of respondents
working has steadily recovered since June for both rural and urban areas,
though the recovery has been larger in rural than urban areas. While the share
of respondents who are working slightly exceeds pre-pandemic levels in rural
areas, it continues to lag in urban areas where 77% of respondents were working
last week compared to 85% prior to the pandemic. This larger increase in rural
levels can be attributed to the seasonality of agriculture, a sector which has
experienced the largest recovery in the share of respondents returning to work.
Even though the overall share of respondents who are working is back to pre-pandemic levels, there continues to be some evidence of people moving in and out of work. Only 34% of respondents have been working continuously since April/May, while 60% have experienced periods without work and 6% have not worked at all since the start of the pandemic. This indicates that there continues to be instability in the job market. Over 17% of all respondents have started and stopped working at some point since mid-March. Most of the respondents that have been in-and-out of work since mid-March have been engaged in agriculture (56%), followed by, commerce (15.6%), construction, transport and professional activities (15.6%), and services (12.2%).
The
recovery has been different across economic sectors. The service sector had
almost fully recovered by June, while commerce has had a slower recovery.
Agriculture shows the highest increase of people returning to work in July and
August, mostly due to the agricultural season with the beginning of the
harvesting season. Despite the fact that many non-farm family businesses have
reopened since the start of the crisis, some of these businesses closed again
between July and August. By August, about 35% of households who operated a
non-farm business since the beginning of 2020 have remained in operation since
April/May, down from 40% during July. About 13% restarted operations in July,
while 12% started operations after July. As of August 2020, almost 26% of
households have businesses that are currently closed, and this number is up
from 23% in July.
Livestock
Livestock
is an important sector of the Nigerian economy with over 54% of households
reporting to have kept livestock since mid-March. This sector has not been
immune from the COVID-19 crisis with nearly 36% of livestock owning households
reporting being adversely affected by the pandemic. The livestock production
activities that have suffered from the coronavirus crisis include access to
feed (89% of affected households), access to healthcare/drugs (79%), and access
to input/output markets (82%).
The
pandemic also led to an increase in the sale of livestock for some households
that might otherwise not have been inclined to sell in the absence of the
pandemic indicating that households are shifting to sale of livestock as a
coping mechanism in the face of COVID19 crisis. Overall, almost 29% of
livestock owning households reported that they usually sell their livestock.
However, the pandemic resulted in an additional 17% of households reporting the
need to sell their livestock as a result of the hardships imposed by the
pandemic. This shift to livestock sales as a result of the coronavirus crisis
was more prevalent among poorer households.
Income Changes and Food Security
Across
the three main income generating activities (wages, agriculture, and non-farm
enterprises), a significant percentage of households report a decrease in
income compared to one year ago. Over 67% of households reported that their
total income decreased compared to the same period one year ago in August 2019,
and this decrease was evident across the three main sources of income. However,
the share of households experiencing a decline in income was highest for
nonfarm family business activities at 65% of households, compared to 58% for
agriculture (household farming, livestock or fishing), and 43% for wage employment.
The
food security situation in Nigeria remains precarious, even as the lockdown
restrictions continue to be loosened. The share of households experiencing
moderate or severe food insecurity remained high at 68% in August 2020.
Experience of both moderate and severe food insecurity are more prevalent than
that reported in July/August 2018 during the first visit of the GHS-Panel.
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