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The Impact of COVID-19 on Profitability of ICT Small & Medium Scale Businesses in Nigeria

TABLE OF CONTENT

TITLE PAGE

Declaration

Certification 

Dedication 

Acknowledgement 

Table of Content List of Tables 

ABSTRACT 

CHAPTER ONE: INTRODUCTION 

Background of the study 

 Statement of the problem 

 Objective of the study 

Significance of the study

 Scope and limitations of the study 

Definition of terms 

CHAPTER TWO:

Review Of Literature 

CHAPTER THREE: RESEARCH METHODOLOGY 

3.1 Research Design 

3.2 Population of the study 

3.3 Sample size determination 

3.4     Sample size selection technique and procedure 

3.5     Research Instrument and Administration 

3.6    Method of data collection 

3.7    Method of data analysis 

3.8    Validity and Reliability of the study 

3.9    Ethical Consideration

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS 

4.1    Data Presentation 

4.2    Answering Research Questions 

CHAPTER FIVE: SUMMARY CONCLUSION AND RECOMMENDATION 

5.0 Summary 

5.1    Conclusion 

5.2    Recommendation 

References  

Appendix


ABSTRACT

This study was carried out on the impact of covid-19 on profitability of ICT small and medium scale businesses in Nigeria. To achieve this 3 research questions were formulated.  The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of the entire Staff MTN walk-in Centers in Ondo State. In determining the sample size, the researcher purposively selected 60 respondents while 50 respondents were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables and percentage. The result of the findings reveals that; Covid-19 had a positive effect on ICT business in Nigeria; ICT products were consumed to a high extent during the Covid-19 outbreak; Revenue and profitability of ICT business in Nigeria also were also affected by the outbreak of Covid-19. Based on the findings, the researcher recommended that the ICT business in Nigeria should adequate ensure the distribution of quality products and services since they played a major during the Covid-19 outbreak. Also, the Nigeria Government should provide an accessible environment and policies easy for Telecom industries to operate on.



CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

On 11 March 2020, the World Health Organization declared the novel coronavirus (COVID-19) outbreak a global pandemic. As the virus made its way across the globe, it induced radical shifts in the ways we interact, learn, work and co-exist with a new normal defining our day to day. COVID-19 has claimed over 4 million lives and infected over 200 million people worldwide.

The pandemic’s impact has touched almost every aspect of modern life, upending public health systems, the global economy, travel, supply chains, community and social ties and how we work. Unemployment has risen, and the global economy shrank by 4.4% in 2020, according to International Monetary Fund (IMF) estimates. The vast majority of nations around the world entered into recessions, having experienced negative GDP growth.

Developing countries have suffered disproportionately due to the socio-economic fallout from the pandemic. Wealthier nations can afford to institute the crippling lockdowns and restrictions necessary at times to arrest the spread of the virus, and to support their populations so they can stay at home in an effort to limit community spread. Many developing countries however were often forced to rely on a mishmash of truncated measures to limit the fallout on populations already living in poverty or who rely on daily work for subsistence. 

The pandemic had an outsized socio-economic impact on Nigeria, which has one of the highest rates of multidimensionally poor individuals in the world. The economy had already suffered due to a rapid decline in oil prices in recent years and security challenges stemming from insurgent violence and competition for resources, and the fallout from the pandemic plunged the Nigerian economy back into a recession - its deepest in over four decades with real GDP contracting for two consecutive quarters by 6.1 percent and 3.6 percent in Q2 and Q3 of 2020, respectively. The impact, however, has been uneven across economic sectors, with some enterprises feeling the adverse economic effects more so than others.

This bird’s eye view, however, offers an aggregate of the overall increase in suffering, poverty, unemployment and business closures prompted by this public health crisis. It obscures the dynamics and developments that together give rise to the aggregate picture. In order to gain a better understanding of these effects at a granular level, UNDP in collaboration with the National Bureau of Statistics has built a comprehensive database of the business environment in Nigeria, offering an unprecedented close-up of the situation in the country and a detailed assessment of the impact of the pandemic on businesses and business owners.

The results of this research work detail the ramifications of the COVID-19 pandemic. Disruption in operations was evident across enterprises with at least two thirds of businesses currently operating in the country having had to close down during the pandemic. The results also shed light on resistance to lockdown directives and regulation by the government, particularly among informal enterprises where a third continued to operate throughout the pandemic. Around one in ten businesses were still closed at the time of the research. 

It is however likely that many businesses were unable to withstand the shock of the pandemic. As many as one in three enterprises interviewed reported knowing of an enterprise similar to theirs that permanently closed due to operational challenges brought about by the pandemic.

STATEMENT OF THE PROBLEM

the impact of Covid-19 on profitability of ICT small and medium scale Enterprises and its effect on the socio-economy.

It also attempts to highlight measures taken by the federal government of Nigeria to reduce the socio-economy impact of the pandemic on the nation.


OBJECTIVES OF THE STUDY

The major objectives of this study are;

To find out the impact of COVID-19 pandemic on business operations

To find out the impact of the pandemic on production and capacity utilization 

To find out what impact the COVID-19 pandemic has on sales, revenue and finances

To be able to show how the pandemic has impacted the relationship between the work-force and the owners.


SIGNIFICANCE OF THE STUDY

An evaluation of the impact of Covid-19 on profitability of ICT small and medium scale Enterprises is of great importance and cannot be over emphasized. It is significant in the following ways;

This paper provides insight into the economic impact of coronavirus 2019 (COVID-19) on small businesses. 

The results shed light on both the financial fragility of many small businesses, and the significant impact COVID-19 had on these businesses in the weeks after the COVID-19–related disruptions began. 

The results also provide evidence on businesses’ expectations about the longer-term impact of COVID-19, as well as their perceptions of relief programs offered by the government.

Serves as a reference point to future researchers in this area to develop upon and also to add more literature in the subject matter.


SCOPE AND LIMITATION

The scope of this study which is meant to evaluate the impact of Covid-19 on profitability of ICT small and medium scale Enterprises. For this reason, the researcher will limit her research findings on the ICT small and medium scale Enterprises in Nigeria only.

DEFINITION OF TERMS

For clear understanding of research work, the following terms have been defined, as used in the research work.

BUSINESS:    Business refers to an enterprising entity or organization that carries out professional activities. They can be commercial, industrial, or others. For-profit business entities do business to earn a profit, while non-profit ones do it for a charitable mission.

ENTERPRISES:    an organization, especially a business, or a difficult and important plan, especially one that will earn money

MECHANISM:    a natural or established process by which something takes place or is brought about.

OPERATIONS:    an active process; a discharge of a function.

REVENUE:    Revenue is the money generated from normal business operations, calculated as the average sales price times the number of units sold. It is the top line (or gross income) figure from which costs are subtracted to determine net income. Revenue is also known as sales on the income statement.

SALES:    the number of goods sold in a given targeted time period.

FUND:    a sum of money saved or made available for a particular purpose.

PROFIT:    a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.

PRODUCTION:    is the process of combining various material inputs and immaterial inputs (plans, knowledge) in order to make something for consumption (output).

WORK-FORCE:     all the people who work for a company or organization

PANDEMIC:    A pandemic is a disease outbreak that spreads across countries or continents. It affects more people and takes more lives than an epidemic

PROFITABILITY:    The degree to which a business or activity yields profit or financial gain.

ICT:    Information, Communication Technology



CHAPTER TWO

LITERATURE REVIEW

INTRODUCTION

According to Ben May (2020), who is the head of global macro research at Oxford Economics, other than the number of cases of Covid-19 there is another key issue which is the level of distribution to economies from containment measures. Widespread lockdowns, such as in China, UK, and Italy have been targeted as some of the virus hotspots and if enough measures are not taken, it can cause even more panic and make the global economy weaken even more. The Covid-19 outbreak has caused fear for the way it is impacting the global economy and how it has impacted markets worldwide, causing plunging stock prices and bond yields (Nee Lee, 2020). Furthermore, the situation has made large banks and institutions to decrease their forecasts for the global economy and a new report from OECD shows that the 2020 growth forecasts have downgraded in almost all economies. Earlier this year, the percentage for the global economic growth was 2.9%, today that number has lowered to 2.4% (Nee Lee, 2020). The manufacturing sector is also one of the most hard-hit sectors by the virus outbreak, especially the Chinese manufacturing industry. Such a slowdown could lead to other countries with close economic links to China to be negatively affected. Chinese factories are taking longer than expected to resume their operations and the further spreading of Covid- 19 in other countries across the globe, indicates that the global manufacturing activity will remain subdued for longer than expected (Nee Lee, 2020).




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