IMPACT OF COVID-19 PANDEMIC ON THE PERFORMANCE OF BUSINESSES IN PORT HARCOURT, RIVERS STATE
ABSTRACT
The impact of Covid-19 pandemic on the performance of businesses cannot be over-emphasized. The pandemic brought about lockdown, movement restrictions, market closure, social distancing, etc. Thus, these restrictions and controls of the movement have particularly the Rivers State private business sector. The private sector is undeniably playing a significant role in the economic development of many countries and the component states. This role performed by the private sector however has been distracted by the global pandemic Covid-19 (Coronavirus). This study aims to examine the Covid-19 pandemic protocol on business survival on the Rivers State private sector, with keen emphasis on Bay Matrix Nigeria Limited, chosen as the case study. The study adopted a survey research design. Data were obtained through a questionnaire administered to 120 staff of the study organization, out of which 100 were used for the study. The data were analysed using frequency tables and simple percentages. Chi-Square was used in analysing the hypothesis of this study. The findings of the study indicate businesses that participated in the study rated the variables of Covid-19 (lockdown, movement restriction, market closure, and social distancing) on a high level. The result further revealed that all the variables in the study correlate with business performance. Therefore, it is recommended that proactive plans should be put in place for the private economy of Rivers State in anticipation of events such as Covid-19 that can hurt businesses. Finally, future research should consider other related variables that have not been considered in this study.
CHAPTER ONE
1.1 Background of the Study
The novel coronavirus disease has become a global challenge to all economies including Nigerian economy and eventually, the Rivers State Private Sector economy. As the number of cases of the novel Coronavirus (Covid-19) continues to grow globally, both developed and developing countries have been grappling with the devastating effects of the pandemic on almost every sphere of human life.
Even as local and international responses continue to develop, many countries around the world are facing significant challenges as a result of the impacts of the virus on their economic systems. From the social to the economic way of life, Covid-19 has radically changed the way things are done, these changes have continued to evolve with the evolving nature of the pandemic. For instance, total or partial lockdowns enforced by most countries in an effort to curb the spread of the virus has generated enormous socio-economic crisis, business closures, bankruptcies, and loss of livelihood. This, no doubt will increase the level of poverty generally.
According to a World Bank report, before the pandemic, the population of Nigerians living in poverty was expected to increase by about two million people as a result of population growth alone (World Bank, 2020). The economic fallouts due to the pandemic are expected to make the situation even direr. Therefore, countries are faced with hard decisions on how to tackle the menace of Covid-19, while managing its impacts on their economies.
Reports from the Brookings Institute shows that Nigeria and its constituent stated had a fragile economy even before the pandemic, as the nation’s GDP growth was estimated at only 2.5 percent in 2020 (Onyekwena and Ekeruche 2020). Similarly, with falling oil revenues, the major contributor to the nation’s treasury, as a result of very weak global demand caused by Covid-19, Nigeria has found itself overburdened by a myriad of challenges on ways to shore up its revenue streams amidst the pandemic.
Worldwide, state-controlled or centrally planned economies are being substituted with market-oriented economies with the private sector as the main engine of growth. In that regard, several developing countries have embarked on initiatives to boost the private sector. These initiatives include new investment regime, trade liberalization and privatization of state owned enterprises. The emphasis on private sector development coupled with the growing globalization of world production and trade in recent years have made investment, particularly foreign direct investment very crucial in industrial development in particular and economic development in general.
Over the years, Nigeria, like other developing countries, has adopted a private sector-led growth with emphasis on policies that will promote investment and industrial development. Recognizing the leading role of the private sector organizations in economic growth does not necessarily mean that the nature of its role in fully understood. With so much focus on the role of the private sector throughout the world, the key question to ask is how these problems / challenges and prospects of private sector organizations can be harnessed and managed to bring about economic growth and a sufficient quality of life to the people.
Providing answers to this question amongst others is the sole objective of this paper and doing this is more important to developing countries like Nigeria who are always at the receiving end of different development paradigms. It needs be pointed out that posing such a question as the sole aim of the paper in no way discounts the essential and invaluable prospects of the sector.
However, Covid-19 Pandemic has a devastating effect on human and material resources and it is one of the greatest events that history will continue to remember. The pandemic spread across the globe without obstacles and the worst that affected the global economy since the great depression (Erdem, 2011; IMF, 2020; WHO, 2020). The case first emerged in Wuhan, China, in 2019 which result in a toll of death that extends to almost all countries of the world (Akanni & Gabriel, 2020). The total number of confirmed cases across the globe was 16, 301,736 as of 28th July 2020, whereas casualties stood at 650,069. In trying to control the spread of the pandemic factories, markets, places of worship were closed, as well as restrictions of movement of people, goods, and services.
This project takes a critical look at the impact of Covid-19 on the business survival of private sectors in Rivers State, with keen emphasis on Bay Matrix Nigeria Limited, an oil and gas servicing company based in Rivers State.
1.2 Statement of the Problem
The rampaging Covid-19 pandemic has adversely affected Nigeria both socially, politically and economically. On February 25, Nigeria recorded her index case of corona virus after an infected Italian National flew into Lagos from Milan and ever since then, Nigeria has recorded over 43, 000 confirmed cases of Covid-19 9 (NCDC, 2020b). As at time of this report, Lagos remain the biggest hit with 15,886 confirmed cases and 192 deaths, Federal Capital Territory (FCT) is second with 3,933 confirmed cases of the virus and third place is Oyo with 2786 confirmed cases and 37 deaths. The oil city, Rivers state is among the worst hit states in Nigeria in terms of fatality with over 1,000 confirmed cases and 53 deaths as at time of this report (NCDC, 2020b). In response to the virus, Nigerian government announced total lockdown and introduced preventive measures which included banning public gathering, closing schools, compulsory use of facemasks and hand washing, etc. The economic impact due to the imposed lockdown necessitated disbursement of palliatives measures by Nigerian governments in the 3 tiers. The palliatives range from cash transfer to the poorest Nigerians, sharing of food items and safety kits across impoverished communities in the country (Ozili, 2020).
Business organizations especially the private sector businesses were not prepared for the pandemic, despite the call by the Public Health Research Institute to adopt precautionary measures on the emergency of such type of events, except big firms were able to take a bold step plan against the pandemic (Rebmann, Wang, Swick, Reddick, & del Rosario, 2013). It is anticipated that the US GDP will likely decrease to 3.8 percent for 2020 due to the pandemic (Hatzius, Philips, Mericle, & Struyven, 2020). Furthermore, Igwe (2020), stressed that the global economy will witness the worst economic recession as a result of the pandemic. The global economy is predicted to record economic losses through three outlets: supply chain, demand, and the financial market. These outlets hurt businesses, household consumption, and international trade.
The global pandemic referred to as Covid-19 (Coronavirus) has caused a lot of damages to the private sector economy. To curtail the spread of the virus has brought about lockdown, a social distancing that results in the closure of markets, public offices, business organizations, places of worship, and events, the extent to which the virus spread and uncertainty about the situation have let consumers and investors run away for safer consumption and investment (Ozili & Arun, 2020). Also, the restriction on the movement of people, goods, and services in many countries causes great losses for businesses and industries which include; aviation, entertainment, hospitality, and sports.
Based on this premise, this study seeks to evaluate the impact of the novel Covid-19 on the business survival of private sector of Rivers State using Bay Matrix Nigeria Limited as the central focus of the study.
1.3 Objectives of the Study
The general objective of this study is the review of the relationship between Covid-19 pandemic protocol and the private sector economy of Rivers State.
Specifically, the study seeks to:
Examine the relationship between lockdown and business survival at Bay Matrix Nigeria Limited.
Determine the relationship between work from home and business survival at Bay Matrix Nigeria Limited.
Evaluate the relationship between social distancing and business survival at Bay Matrix Nigeria Limited.
1.4 Research Questions
This study will be guided by the following research questions:
What is the relationship between lockdown and business survival at Bay Matrix Nigeria Limited?
What is the relationship between work from home and business survival at Bay Matrix Nigeria Limited?
What is the relationship between social distancing and business survival at Bay Matrix Nigeria Limited?
1.5 Research Hypothesis
The following null (H0) and alternative (H1) hypothesis are formulated for this project, from the research questions.
Hypothesis I
H0: There is no significant relationship between lockdown and business survival at Bay Matrix Nigeria Limited.
H1: There is a significant relationship between lockdown and business survival at Bay Matrix Nigeria Limited.
Hypothesis II
H0: There is no significant relationship between work from home and business survival at Bay Matrix Nigeria Limited.
H1: There is a significant relationship between work from home and business survival at Bay Matrix Nigeria Limited.
Hypothesis III
H0: There is no significant relationship between social distancing and business survival at Bay Matrix Nigeria Limited.
H1: There is a significant relationship between social distancing and business survival at Bay Matrix Nigeria Limited.
1.6 Scope of the Study
This study revolved around the review of how the Coronavirus pandemic affected the business survival of the private sector of Rivers State, Nigeria. The study reviewed the negative and possibly the positive effects of the pandemic on the private sector economy and was limited to the survey of the business survival of Bay Matrix Nigeria Limited, resident Port Harcourt City of Rivers State.
1.7 Limitations of the Study
The researcher was faced with some challenges in the course of carrying out this study. Such challenges include financial and material constraints which is beyond the researcher’s control.
Others are:
Time Constraints: The time made available for this study is limited since other activities are bound to interfere with the time allowed for the research. Moreso, as a student researcher managing the time to this work was cumbersome.
Infrastructural Inadequacies: The inadequacy of electricity provision to aid the researcher study at night, the traffic jams on the roads as the researcher has to move about in collection of materials, lack of good network of communication created limitations. Also, sourcing materials was not easy as most of the libraries are not well stocked with the pre-requisite textbooks.
Lack of Funds: Finances was not readily available to meet the high cost of materials, transport caused by the recent increase in fuel price. There was no research grant to aid in this research work.
However, despite all these short-comings, the study was able to establish the role of motivation in improving job satisfaction in an organization.
1.8 Significance of the Study
The purpose of this work has greatly been outplayed. This work greatly shows impact of Covid-19 on the business survival of Rivers State private sector business organizations and the influence on the productivity of business organizations within the state.
Consequent upon this also is the spread of business without adequate feasibility studies which will guarantee unmitigated production and liquidity ration of capital. This study will be beneficial to business organizations as it gives numerous reasons why feasibility studies should be conducted in order to establish the organization to be sited to ensure maximum productivity in a competitive market.
The government of the state will benefit immensely from this study as the shareholders and playmakers will know the right channels to invest its resources and how to go about the management.
Finally, students and potential investors for knowledge acquirement also equipped good future business administrators in any part of the world and for wise investment decisions.
1.9 Definition of Terms
Covid-19: Covid-19 is a disease caused by a new strain of coronavirus. ‘CO’ stands for corona, ‘VI’ for virus, and ‘D’ for disease. Formerly, this disease was referred to as ‘2019 novel coronavirus’ or ‘2019-nCoV.’
Private Sector: The private sector is the part of the economy that is not state controlled. It is run by individuals and companies for profit. It encompasses all for profit businesses, which are not owned or operated by the government.
Performance: The accomplishment of a given task measured against present known standards of accuracy, completeness, cost and speed.
Productivity: a measure of how well resources are brought together in organization and optimally utilized for accomplishing a set of results.
Business Survival: Business survival is the ability of a business entity or organization to stand in the midst of challenges and environmental constraints while achieving its pre-selected goals.
Organization: this is a deliberate association of two or more individuals working co-operational towards a common objective under authority and leadership.
Business Organization: These are organization primarily oriented towards economic productions.
Management: this is the process of directing co-coordinating and influencing the operations of an organization so as to obtain desired results and enhance performance and survival.
Technology: the science of technical process in a wide, thorough related field of knowledge. This industrial technology embraces the chemical mechanical and physical sciences as these are applied in industrial processes.
Decision Making: This is a series of steps that starts with an identification of problem under consideration. It can simply be said to mean a deliberate adoption of means to ends.
1.10 Profile of the Study Organization
Bay Matrix Limited is a wholly indigenous engineering, technical procurement and services company with head office and equipment yard in Port Harcourt.
The products and services are developed to provide relevant and effective solutions to the emerging oil & gas and power industry sectors in Nigeria and West Africa.
They have undertaken various studies and projects aimed at assisting industrial and commercial organizations in urban and remote locations to review and re-organize their energy and fuel needs; this has led to the development and adoption of innovative reticulated LPG and Natural Gas-based solutions.
They believe in Africa and its future and dedicate ourselves to supporting the African dream of development and modernization; their service and products are designed to enhance and ensure realization of the vision of the clients.
The vision of the company is to become a world class organization seeking and acting on opportunities that create wealth within the Oil & Gas, and Energy Sectors across the African Continent.
The mission of the company is focused on the development of the midstream and downstream Gas & Power Sector business across Africa. Their contribution will be measurable, effective and sustainable; always proffering solutions that significantly improve operational and financial performance of our clients while creating wealth and good reputation for all stakeholders.
IMPACT OF COVID-19 PANDEMIC ON THE PERFORMANCE OF BUSINESSES IN PORT HARCOURT, RIVERS STATE