The Nigerian Bureau of Statistics (NBS), recently released the COVID-19 impact report for the month of August 2020, which revealed that 51.3% of Nigerian households, who obtained loan since the lockdown in mid-March, used it to purchase foodstuffs.
According to the report, due to the effect of the pandemic on the livelihood of Nigerians, characterized by loss of jobs and salary/pay cuts, many households have had to take out loans to meet their pressing financial obligations. Interestingly, just as with loans taken before the pandemic, new loans were primarily used for food items, farm and non-farm business inputs.
- About 1 in 4 households were indebted prior to the pandemic, while nearly a third have taken out new loans, since the onset of the pandemic. Poorer households were more likely than richer household to have to repay loans taken before the pandemic.
- The overall share of respondents who are working is back to pre-pandemic levels, though there continues to be some evidence of people moving in and out of work.
- Only 34% of respondents have been working continuously since April/May; while 60% have experienced periods without work, and 6% have not worked at all since the start of the pandemic. Indicating instability in the labor market.
- Over 67% of households reported that their total income decreased, compared to the same period one year ago in August 2019, and this decrease was evident across the three main sources of income (wages, agriculture, and non-farm enterprise).
- The food security situation in Nigeria remains precarious, even as the lockdown restrictions continue to be loosened. The share of households experiencing moderate or severe food insecurity remained high at 68% in August 2020.
- A comparative analysis between pre-COVID and the peri-COVID era, shows that 51.3% of the respondents who obtained loans during the lockdown used it for household sustenance as against 40.9% recorded pre-COVID era. Meanwhile, only 3.3% of the respondents made use of the loans for educational purposes, compared to 8.6% before the pandemic. This makes sense since most academic activities were put on hold during the period.
