New Research Shows that Nearly Half of Nigerians Reported Reduced Income Soon After Lockdowns Started
A recent survey carried out by FinMark Trust through the i2i initiative, in partnership with EFInA, reveals that some Nigerian households are beginning to experience reduced income, lower food consumption, and reduced access to financial and health services following the onset of the COVID-19 epidemic and related lockdowns. The survey, conducted via mobile phones, was commissioned to generate more complete and inclusive data on how the COVID-19 pandemic is impacting lives of Nigerians. The survey is nationally representative of the Nigerian adult population (18+) as more than 1,800 adults were surveyed between April 8 and 16 via telephone. Similar surveys were also carried out in Kenya and South Africa.
How COVID-19 will Force Nigeria’s Financial Sector to Innovate
” Responding to the COVID-19 pandemic will require the Nigerian financial sector to work differently, both during the immediate crisis and in the longer term. In the immediate term, innovation will need to focus on survival. Nigerians will need more credit when their income is interrupted, yet they may also struggle to repay those loans until regular economic activity resumes. Some financial institutions, such as microfinance banks, may be put at risk if customers are unable to repay loans for a period. Some measures, such as the Central Bank of Nigeria’s N50 billion Targeted Credit Facility, are being introduced to help bridge the gap ”
Percentage of Adult Population Earning Daily Weekly Income
key findings from EFInA Access to Financial Services in Nigeria Survey A2F 2018 shows COVID-19 poses a threat to the livelihoods of about 50% of the 99.6 million Nigerian adult population who earn their income on a daily/weekly basis. The threat across states differ significantly, with over 4.5m adults at risk in Lagos while Ogun has 1.7m & FCT has 800k at risk.
Nigerian Adults Facing Shocks Likely to be Exacerbated by COVID-19 Crisis
According to A2F 2018, 46.4m adult Nigerians found it very difficult to meet their basic needs when faced with financial shocks that led to unplanned expenses in the past. COVID-19 is likely to exacerbate these top 7 shocks which relate to health, economy&business conditions. This same data shows 58% of Nigerian adults who face financial shocks and are likely to be negatively impacted by COVID-19 are not borrowing, 42% are not saving, about 25M are aged between 18 & 35, about 12M earn 15K and below while another15M earn 35k per month.
Coping Mechanisms of 46.4m Adults Who Experienced Shocks in the Past
Saving Pattern of the Nigerian Adult Population
COVID 19: Impact and Opportunities for Financial Services Agents in Nigeria
COVID-19 has had a significant impact on the global economy, with surging infections, cities in lockdown, businesses shutting down, travel restrictions and staff layoffs. Forbes report the impact in four basic ways. First, supply chain failures because of the impact of the pandemic on China. The second harm results from the direct effects of illness in lost work by those who are sick or attending to the sick. The third and biggest impact to date is the indirect effect of quarantines, travel restrictions, restaurant and store closures, and so forth. These are weighty and trigger the fourth implication which is a surge in demand shocks as the incomes of many people diminish. According to a recent report by the United Nations Development Programme, the socioeconomic impact of COVID 19 on poor and developing countries will take years to recover from, with income losses in developing countries forecast to exceed $220bn. It estimated that nearly half of all jobs in Africa could be lost.
Partnership for Evidence-Based Responses to COVID-19 (PERC)
Data being collated by the Partnership for Evidence-Based Responses to COVID-19 (PERC): https://preventepidemics.org/covid19/perc/ Their report on Nigeria can be found HERE and was last updated on April 30, 2020.
IPSOS Key findings from Responding to COVID-19 in Africa Surveys in 20 Countries
PSOS (as part of work under PERC) conducted 20,990 interviews in 28 cities across 20 African Union Member States to understand reactions to the pandemic and to Public Health Social Measures: https://www.ipsos.com/en/responding-covid-19-africa-key-findings-from-surveys-in-20-countries Highlights of the Nigeria survey can be found HERE.
Understanding COVID-19’s Impact on Financial Health of MSMEs
The Center for Financial Inclusion at Accion (CFI) is embarking on an ambitious research program to collect data on micro, small, and medium enterprise (MSME) performance and resilience during the COVID-19 pandemic. CFI’s research will provide financial inclusion stakeholders with the insights they need to develop policy, products, and services to support MSMEs across the globe. Highlights can be found Here
McKinsey and Dalberg – Impact of COVID-19 on Banking & Fintech
Both McKinsey and Dalberg have published findings of the expected impact of the pandemic on the Nigerian economy and PwC recently published its assessment of the impact on the banking and fintech sectors. Highlights can be found Here