AN EVALUATION OF THE COVID-19 LOCKDOWN AND ITS EFFECT ON IMPORTATION IN NIGERIA

AN EVALUATION OF THE COVID-19 LOCKDOWN AND ITS EFFECT ON IMPORTATION IN NIGERIA

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BACKGROUND OF THE STUDY

Importing raw materials and machinery is one way to increase profit margins. Importing items has a lot of advantages, including excellent quality, affordable pricing, and advantages associated to international trade. An importer may have a comparative advantage, resulting in reduced prices (Jones, 2006). Also, because of reduced labor costs, low taxes, and so on, the importer may obtain considerably cheaper items from the overseas market. In terms of quality, the importer can have higher quality commodities and manufacture high-quality completed items, hence increasing business profit margins. Imports provide developing countries with an opportunity to grow their economies, produce higher-quality products, and increase income by bringing a new product to a region. Imports increase market diversity for buyers and citizens of certain nations by allowing them to get foreign items without having to travel or pay additional expenses. The advantages of imports extend beyond individuals to corporations. Local enterprises that import items might carve out a profitable niche in their local market as the exclusive local provider of a specific product (Nelson and Winter, 2007)

COVID-19 has caused havoc in all economic sectors and businesses throughout the world. The interruptions are mostly the result of lockdown measures developed and implemented by governments throughout the world as a health plan to reduce the impact of the pandemic's spread on the human population. The COVID-19 lockdown measures have resulted in production halts, limitations on persons and goods movement, border closures, logistical challenges, and a slowdown in trade and economic activity. On December 31, 2019, the World Health Organization (WHO) office in China received the first report of the COVID-19 pandemic, which began in Wuhan, China. There has been about 22.1 million recorded cases as of August 17, 2020. Its growth in China, one of the world's main manufacturing and distribution centres, impacted the supply of completed and semi-finished products to nations across the world that rely on China for commerce.

Importation is vital for the development and expansion of national economies since not all countries have the resources and skills necessary to create certain commodities and services, thus they must import things that are not made in their country.

This includes production machinery, raw materials, and other economically profitable items. As a result, the lockdown policy spawned by the epidemic, with countries locking their borders, would have a severe impact on economies.

1.2 STATEMENT OF THE PROBLEM

With the implementation of the lockdown, the transportation sector upon which global importation activities are dependent, has remained partially closed. Statistics show that no less than 90 countries had imposed lockdowns since March 2020 and at the peak in April 2020, about 3.9 billion people were under lockdown(htpp/wikipideia/lockdown2020). Consequently, there were constraints to the smooth functioning of the global supply-chains, and this has had an adverse impact on global business and industrial activities. The shipping industry, which accounts for about 90% of global trade activities estimated at about $12 trillion, has been impacted by the pandemic(WTO 2020). By implication, the World Trade Organization (WTO) estimated that global trade will fall by between 13% to 32%, in terms of volume, by year-end 2020. The disruption in importation have also impacted other sectors including manufacturing, retail, construction,supply chains among others. According to the WTO (2020), nearly all regions have experienced double-digit decline in trade volumes in 2020, with the most dips in imports coming from Asia and North America. The electronics and automotive segments will be the hardest hit due to the complexity of their value and supply-chains.However there is no doubt that Nigeria, as one of those countries that depends on importation of certain machines,automotive and electronics would also be hit hard by the covid-19 lockdown. Thus, it is against this backdrop that this study is set to do a critical analysis of the effect of lockdown on importation.

1.3 OBJECTIVE OF THE STUDY

This study is set to observe a critical analysis on the effect of lockdown on importation. Specifically it is geared:

1. To examine the benefit of importation to industries
2. To access the effect of covid-19 lockdown on supply-chain of products
3. To investigate the rate at which covid-19 lockdown affected trade activities

1.4 SIGNIFICANCE OF THE STUDY

This study contribute to the existing knowledge body. Moreso it will enable business owners to diversify other local means of sourcing for raw material. It would aid manufacturing industries to improvise for local made machines in the absence of imported automotive and machines. It will heighten the awareness among policy makers and government on the need to support manufacturers of locally-made raw materials, machines and automobiles with loans in other to encourage them.it would also lay emphasis to general consumers on the need to patronize made in Nigeria product rather than depending on imported goods.

1.5 SCOPE OF THE STUDY

This study is set to observe a critical analysis on the effect of lockdown on importation. Specifically it is set to examine the benefit of importation to industries. It will also access the effect of covid-19 lockdown on supply-chain of products.Furthermore, it will investigate the rate at which covid-19 lockdown affected trade activities. However the study is delimited to Nigerian port Authority, Lagos State, Nigeria as the sampled participant.

1.6 RESEARCH HYPOTHESIS

H0: There is no significant effect of covid-19 lockdown on supply-chain of goods and services

H0: There is no significant effect of covid-19 lockdown on importation.

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.

1.9 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. 

Importation:importation is the action of buying or acquiring products or services from another country or another market other than own.

Supply-chain: A supply chain is defined as the entire process of making and selling commercial goods, including every stage from the supply of materials and the manufacture of the goods through to their distribution and sale.

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