How COVID-19 Is Hitting Employment in Nigeria — and Pushing People Into Poverty
Small and medium-sized enterprises (SMEs) are responsible for most of Nigeria's employment.
A few minutes later, she received a call from an operations associate telling her that she was being fired and she should expect an email to that effect in her personal inbox. Only one reason was given: the coronavirus.
“It was just a normal work Monday but before noon, I was unemployed, unsure of what to do and unsure of what the future held. In the middle of a pandemic,” Adegoke, who had led communications for a financial technology company in Lagos, told Global Citizen.
“I’ve just been surviving on savings because finding another job while the pandemic is still around has been very difficult,” she added. “I can’t even send money to my sisters. No one is hiring and all my plans are on hold.”
All over Nigeria, there are hundreds, if not thousands, of stories like Adegoke’s. Before COVID-19, Nigeria’s unemployment rate was already sky high at 23.1% while underemployment stood at 16%, according to a 2018 report by the National Bureau of Statistics (NBS).
In May 2019, Minister of Labour and Employment Chris Ngige said the federal government forecast an unemployment rate of 33.5% by 2020.
Since the pandemic hit, however, the situation has gotten worse — Vice President Yemi Osinbajo, who chairs Nigeria’s Economic Sustainability Committee (ESC), said the government was anticipating 39.4 million job losses by December due to the pandemic. That number is likely to be higher given the impact the pandemic has had on trade globally.
All of this means more Nigerians, especially in the lower middle class, could potentially be forced to live below the poverty line.
For Stephanie, who worked at a company in Lagos, the pay cuts first came in March after which she decided to resign.
“After I left, I heard they fired the rest of the staff in the Lagos office. I also didn’t get my full payment when I left [including] benefits,” she told Global Citizen. “I applied for a job I’d have gotten — office manager role — obviously they have no use for me now. Even for writing jobs, if the story isn’t COVID related no one wants to hear. [My] income [has gone] from about 311,000 Naira ($802) to maybe 60,000 Naira ($154) [at most] in a month.”
In 2019, the NBS reported that 40% of people in Africa's most populous country lived below its poverty line of 137,430 Naira (~$354) a year. In other words, four out of every 10 Nigerians live on less than $354 yearly.
In 2019, the world poverty clock ranked Nigeria as the poverty capital of the world with an estimated 89.1 million people — out of a population of 196 million — living in extreme poverty. Those numbers are likely to increase thanks to the impact of COVID-19 on businesses and the resulting job losses.
In May, reports surfaced that Access Bank (Nigeria’s largest) would downsize due to the pandemic. It took the intervention of the Central Bank of Nigeria (CBN), via an agreement with the banks, to suspend staff layoffs until further notice to help “minimise and mitigate the negative impact of the COVID-19 pandemic on families and livelihoods,” according to the apex bank.
Access Bank eventually settled for a restructuring of salaries “across the institution as a result of the impact of COVID-19.”
Other businesses have had to adapt in various ways to combat the effects of the pandemic. At financial technology company PiggyVest for example, it has upgraded health insurance cover for its staff and is maintaining a work from home policy till further notice.
“As an employer, I think it has [changed] what it means to care for the welfare of my team. So it’s not just about them showing up to work daily where we see them, or now hitting those productivity numbers from home, it’s about checking in on their mental health. Making sure they have as much reason to laugh as to work,” PiggyVest co-founder Odunayo Eweniyi told Global Citizen. “Because we’re a relatively small team, that’s been easier.”
But small and medium-sized enterprises (SMEs), which are responsible for most of Nigeria's employment, are the hardest hit. They account for 96% of businesses and 84% of jobs (compared to 53% in the US, 60% in South Africa, and 65% in Europe) and for the last five years, they have contributed almost half of Nigeria's gross domestic product (GDP).
“I have not been able to order goods because of the restrictions on movement and I have no inventory left,” Lolade Jones, a small business owner in Lagos, told Global Citizen. “I’m not even sure there will still be demand for my goods.”
“A lot of my customers who owe outstanding payment can’t pay up because they’ve lost their jobs or some kind of calamity relating to COVID has happened,” she added. “There’s no telling what the future holds.”
The United Nations’ Sustainable Development Goal (SDG) 1, to end extreme poverty by 2030, is our core mission at Global Citizen. Since the 1990s a steady downward trend has shown global inequality to be decreasing between countries, but the COVID-19 pandemic threatens to up-end all the work done so far.
To put an end to the COVID-19 pandemic globally, we need to urgently develop tests, treatments, and vaccines, and we have also got to ensure that these anti-COVID-19 tools reach everyone, everywhere, equally.
Join the movement to fight COVID-19 and mitigate its impact on the world’s most vulnerable by taking action here to support our Global Goal: Unite for Our Future campaign, to urge world leaders to step up funding to deliver and distribute tests, treatments, and vaccines, in a way that’s equitable and ensures no one is left behind. You can find out more about COVID-19 and its impacts on communities around the world through our coverage of the pandemic here.