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SAM ADVANCED MANAGEMENT JOURNAL
An Empirical Study of COVID-19 Impacts and SMEs in Nigeria
Chidume Uzozie and Alphonso Ogbuehi
Citation: Uzozie, C. & Ogbuehi, A.,(2021). An empirical study of COVID-19 impacts and SMEs in Nigeria. SAM Advanced Management Journal, 86(3),58-70.
Abstract
The Novel Corona (Covid -19) virus pandemic has adversely affected most of the world, including Nigeria, with significant impact on healthcare systems and businesses. Nigerian SMEs are not immune to the effects of the pandemic and, given their key role in the economy, the need to understand the impact of the pandemic on them becomes imperative.The impact of this virus on the economies of the world and how they should have been mitigated or ameliorated was examined considering the management theories of Warren Bennis and Burt Nanus which states that business leaders, and by extension country leaders, should analyze current and potential problems considering 4 factors: Vulnerability, Uncertainty, Complexity and Ambiguity (VUCA). These factors ensure a holistic approach to anticipating potential challenges (Business, governance etc.), crafting a robust strategy and implementing an enduring plan to prevent, ameliorate problems and harness potential opportunities.Relevant data was gathered by administering questionnaires to SME owners and managers in diverse sectors across Nigeria, focusing on their core business operations (supply chain, production, human resources, finance etc.) during the period of the pandemic. Findings showed a direct impact of the pandemic on the ability of most of the SMEs to conduct business efficiently with attendant implications. Specifically, they experienced significant reduction in revenue, rising cost of operations, disrupted supply chain/ logistics, shrinking access to and rising cost of funds. This situation led to drastic reduction of business operations including staff rationalization and, in some instances, a complete shutdown. The challenges of Nigerian SMEs could be ameliorated, and their businesses resuscitated through targeted government interventions such as provision of affordable funding, incentives (e.g. tax break, import waivers), and improvement of existing infrastructure. Until vaccine options become available, such fiscal interventions must be implemented and sustained for the immediate future.
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