ECONOMIC IMPLICATIONS OF COVID-19 ON SMALL AND MEDIUM ENTERPRISES IN KEBBI STATE

1.1 Introduction

The COVID-19 outbreak is a sharp reminder that pandemics, like other rarely occurring catastrophes, have happened in the past and will continue to happen in the future. Even if we cannot prevent dangerous viruses from emerging, we should prepare to dampen their effects on society. The current outbreak has had severe economic consequences across the globe, and it does not look like any country will be unaffected. This not only has consequences for the economy; all of society is affected, which has led to dramatic changes in how businesses act and consumers behave. This special issue is a global effort to address some of the pandemic-related issues affecting society.

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.

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1.2 Background of Study

The corona virus outbreak, later coded as Covid-19, hit the world like a thunderbolt towards the end of December, 2019. At its inception in Wuhan city in China, it was regarded as a regional health challenge whose global potential risk was summarily underestimated. Although, many countries were in solidarity with China upon this health disaster, Covid-19 was nonetheless not perceived as a threat with a global scale. In fact, the World Health Organization (WHO) declared that the health crisis in China had no global potential threat2. However, given that the modern world is entrenched in the concept of globalization and the position of China as the manufacturing hub of the world; a seemingly less risky Chinese health issue metamorphosed into a global scale with lethal consequences (Price and van Holm, 2020; Ezeaku and Asongu, 2020).

SMEs have contributed greatly to Nigeria development by provision of employment, marketing of goods and services and, growth and development of rural areas. It has also brought about the growth of indigenous entrepreneurship in Nigeria. A business whether small or big, simple or complex, private or public, is created to provide competitive prices. Business in Nigeria has been classified as small, medium and large. However, a small-scale industry can be defined by the criteria of project costs, capital cost, turnover by the employee etc. The Federal and State Ministries of Industry and Commerce have adopted, the criterion of installed fixed capital to determine what small-scale industry is, in this respect the value has varied from N60,000 in 1972 N159,000 in 1975, N250,000 in 1979 and N500,000 in 1986, to a fixed investment not more than N2,000,000 (two million naira) in 1992. These figures are exclusive of building and subject to government determination and land pervading objectives of public policy. In the wake of SAP and SFEM, this value has now been reviewed and subsequently increased to five million naira. Since this happened, there may be a need to classify the small-scale industry into MICRO and SUPER MICRO business, with a view to providing adequate incentives and protection for the former.

In the meantime, any business or enterprise below the upper limit of N250,000 and whose turnover exceed that of a cottage industry currently put at N500,000 per annum is small-scale industry. The National Directorate of Employment (NDE) concept of a small-scale industry had been fixed to a maximum of N35,000. However, there are many enterprise in Nigeria categorized as small businesses. Most of them are in the commercial sector and there is also trend now towards the service industry, hotels, restaurants, fast food etc.

Therefore, in Kebbi State where the research was carried out, the activities that was conducted is to know the Economic Implications of Covid-19 on Small and Medium Enterprises (SMEs).

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1.3 Statement of Problems

COVID-19 has made it evident that many organizations do not implement state of the science performance management systems and, instead, have just performance appraisal systems that typically involve a once-a-year evaluation and review, little effort to provide feedback and coaching on an ongoing basis, little alignment between employee performance and the organization’s strategic goals, a focus on past performance only, and ownership by the human resources function instead of those rating and being rated.

Thus, the lack of value contributed by the usual performance evaluation and review process is the reason why so many organizations are postponing or even completely discontinuing performance evaluations.

The drastic escalation of coronavirus did not only affect learning, it compounded the pre-existing education inequalities in institutions, with vulnerable and disadvantaged students at the receiving end. To curb the widening of the existing education inequalities, there is a responsibility on the institution management to put in place measures to ensure continuity, inclusion and equity for all learners during this pandemic. Observation shows that higher institutions either postponed or cancelled all campus events such as graduation ceremonies, workshops, conferences, sports (both intra and inter universities), and other activities. The COVID-19 Pandemic also led to the suspension of the academic calendar of higher institutions.

The very low productivity of the private sector and the lack of diversification of the economy are due mainly to the inhospitable business environment, infrastructure deficiencies, poor security of lives and property and the use of obsolete business methods all acting as constraint. But many experts recognize marketing as a major problem and relevant solution to growth of small-scale business.

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1.4 Aim and Objectives of Study

The aim of the study is to scrutinize the Economic Implications of Covid-19 on Small and Medium Enterprises (SMEs). In achieving this aim, the following specific objectives were laid out as follows:

1. To investigate the Economic Implications of Covid-19 on marketing in SMEs with the intention of validating or falsifying the model with a large questionnaire survey of SMEs
2. To critically evaluate the likely value of the model for analyzing and predicting the behaviour of SMEs with regard to marketing and suggesting strategies for SMEs
3. To investigate and appropriately assess small firm practices in a broader and more contemporary perspective whether it conform with relationship marketing and marketing concept.
4. To ascertain whether the incidence of business failure suggest a deficiency in the application of the appropriate marketing practices during Covid-19.

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1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

• Are there Economic Implications of Covid-19 on SMEs in Kebbi State?
• Does the value of model, analyzes and predicts the behaviour of SMEs with regard to marketing for SMEs?
• Does the incidence of business failure occur in the application of the appropriate marketing practices during Covid-19?
• What are the marketing practices of small-scale manufacturing businesses in Kebbi State?
• What are the Economic Implications of Covid-19 on marketing in SMEs?
• What are the likely value of the model for analyzing and predicting the behaviour of SMEs during Covid-19?

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1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

• H0: There is no significant Economic Implications of Covid-19 on Small and Medium Enterprises in Kebbi State
• H1: There is significant Economic Implications of Covid-19 on Small and Medium Enterprises in Kebbi State

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1.7 Significance of Study

The results of the study would provide an insight into the kind of marketing practices adopted by small-scale in accordance with the traditional expository tendencies of marketing concept, which focuses in satisfying the need and wants of target market profitably. This knowledge would no doubt help entrepreneurs, academics, scholars and marketing practitioners alike to keep abreast of current marketing practices of small-scale business. Essentially, the study would contribute immensely to the expansion of and improvement of theoretical base of marketing teachers in terms of practices common in small-scale businesses.

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1.8 Scope of Study

The study focuses on the Economic Implications of Covid-19 on Small and Medium Enterprises (SMEs) using Kebbi State as a case study.

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1.9 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Research material: availability of research material is a major setback to the scope of the study.
3. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
4. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).