AN ASSESSMENT OF COVID-19 AND ITS IMPACT IN THE MANUFACTURING SECTOR IN NIGERIA

AN ASSESSMENT OF COVID-19 AND ITS IMPACT IN THE MANUFACTURING SECTOR IN NIGERIA

BACKGROUND OF THE STUDY

Manufacturing has long played an important part in emerging countries' economic progress. The manufacturing industry is concerned with the design, processing, and preparation of goods made from commodities and raw materials. Automobile, chemical, food & beverage, mechanical, electrical, and other sectors are included. The manufacturing sector is an important portion of the economy, accounting for almost 16% of global GDP in 2018 (http://www.datallytics.com/).

The manufacturing sector was one of the most damaged by COVID-19. A terrible number of new cases were recorded in China and numerous nations across the world in the first three months after COVID-19 arose in Wuhan City, Hubei Province, China. The World Health Organization (WHO) officially designated it a worldwide pandemic in March 2020 (WHO 2020). COVID-19 is believed to be spread by respiratory droplets via contact pathways such as the mouth, nose, conjunctiva, or eyes (UNICEF 2020). The new corona virus most commonly began in China, which is home to the bulk of the facilities that supply raw ingredients to various production units across the world. Measures were made to prevent the infection from spreading, necessitating the lockdown.

The subsequent lockout brought production facilities to a halt, destabilizing the whole global supply chain. To put things in context, more than 75% of enterprises have "one or more direct or Tier 1 suppliers" from China, and 938 of the Fortune 1000 have Tier 2 suppliers there (Batch E.RP 2020). This set off a cascade of events that included a dramatic drop in worldwide Foreign Direct Investment (FDI) inflows and a global economic slowdown. The United Nations Conference on Trade and Development (UNCTAD) predicted that the COVID-19 epidemic might reduce worldwide FDI by 5 to 15% owing to a drop in the manufacturing sector and plant closures. 

1.2 STATEMENT OF THE PROBLEM

COVID-19's impact on the global manufacturing industry can be divided into discrete manufacturing (automotive, machinery, electrical and electronics, metal, aviation, and so on) and process manufacturing (food & beverage, chemicals, pharmaceutical and medical equipment, paint and coatings, and personal care & cosmetics, among others).

Food and beverage manufacturing firms are currently dealing with considerably reduced customer consumption as well as supply chain concerns. Apart from the supply chain disruption, rampant stockpilers who have participated in panic purchasing have contributed significantly to increased scarcity on food aisles.

The delivery of raw materials and ingredients to industrial locations has been severely disrupted, hampering output and causing enterprises to cancel operations. Another key issue has been the availability of personnel at a period of social distance. As a result, according to a research conducted by the French trade association ANIA, food and beverage industries such as Dangote Sugar have experienced a 22 percent drop in worldwide sales. While at-home consumption has increased, out-of-home spending, which has typically generated better margins, has come to a halt. As a result, the purpose of this research is to investigate the influence of covid-19 on the manufacturing sector.

1.3 OBJECTIVE OF THE STUDY

The study is aimed at critically examining the impact of covid-19 in the manufacturing sector. Specifically it is geared

1. To examine the economic relevance of manufacturing sector.
2. To access the effect of covid-19 on food and beverage companies.
3. To determine the extent at which covid-19 affected the manufacturing sector.

1.4 RESEARCH HYPOTHESIS

H0: The rate at which covid-19 affected manufacturing sector is low

H0: There is no significant effect of covid-19 on food and beverage manufacturing company.

1.5 SIGNIFICANCE OF THE STUDY

This study will be significant to the entire knowledge body. It will enable business owners who are into manufacturing to re-strategise on ways of making their business thrive in the face of pandemic. It will heighten the awareness of government on the need to support manufacturing industries since they have an economic relevance to the elopement of the country. The study would also create opportunity for further research on the subject of discuss.

 

1.6 SCOPE OF THE STUDY

The study is aimed at critically examining the impact of covid-19 in the manufacturing sector.it will also examine the economic relevance of manufacturing sector.it will further access the effect of covid-19 on food and beverage companies. More so it will determine the rate at which covid-19 affected the manufacturing sector.However the study is delimited to Dangote Sugar Refinery, Lagos State Nigeria.

1.7 LIMITATION OF THE STUDY

During the course of the study challenges encountered were exclusively but not delimited to the following numerous. These are;

Inadequate finance: the research was face with problem of inadequate fund which hinder the researcher from shuttering to Access Banks within Lagos more so in printing and collation of questionnaires.

Time constrain: time factor pose another constraint since having to cope in this research which went simultaneously within the time schedule of other academic work making it impossible to undertake this study in large more representative skill.

1.8 DEFINITION OF TERMS

COVID-19: Corona virus disease 2019 (COVID-19) is defined as illness caused by a novel corona virus called severe acute respiratory syndrome corona virus 2 (SARS-CoV-2).

Lockdown: A lockdown is a restriction policy for people or community to stay where they are, usually due to specific risks to themselves or to others if they can move and interact freely.

Manufacturing Sector: The manufacturing sector as defined by the U.S. government, comprises of establishments or companies that are engaged in the mechanical(including assembling of component parts), physical, or chemical transformation of raw materials, substances, or components into new products.

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