CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
Increasing profit margins by importing raw materials and machines is one option. Importing items has a lot of advantages, including excellent quality, affordable pricing, and benefits associated to international trade. An importer may benefit from a competitive advantage, resulting in decreased prices (Jones, 2006). Due to reduced labor costs, low taxes, and other factors, the importer can get significantly cheaper products from the overseas market. In terms of quality, the importer can purchase higher-grade goods and make high-quality completed goods, increasing firm profit margins. Imports provide developing countries with opportunities to grow their economies, produce higher-quality products, and increase revenue by bringing a new product to a market.
Local businesses that engage in importing goods can create a valuable niche in their local market as the primary local supplier of a particular product. (Nelson and Winter, 2007).
COVID-19 has disrupted global activities across all economic sectors and industries. The disruptions are largely due to the lockdown measures adopted and implemented by countries globally as a health strategy to mitigate the impact of the pandemic’s spread on the human population. Production halts, movement restrictions of people and goods, border closures, logistical constraints, as well as the slowdown of trade and business activities are fall-outs of the COVID-19 lockdown measures. Importation is critical for the development and growth of national economies because not all countries have the resources and skills necessary to produce certain goods and services, necessitating the importation of products that are not manufactured in their country. This includes production machinery, raw materials, and other economically profitable products. As a result, the lockdown policy spawned by the epidemic, which saw countries close their borders, would have a severe impact on economies.
STATEMENT OF PROBLEM
The transportation industry, which is dependent on worldwide importation activity, has remained partially blocked as a result of the lockdown. Since March 2020, no fewer than 90 countries have enforced lockdowns, with around 3.9 billion people under lockdown at its peak in April 2020 (htpp/wikipideia/lockdown2020). As a result, the smooth functioning of global supply chains was hampered, which had a negative influence on global business and industrial activity. The epidemic has had an impact on the maritime industry, which accounts for over 90% of worldwide commerce activity worth about $12 trillion (WTO 2020). By implication, the World Trade Organization (WTO) estimates that world trade will decline by 13 to 32 percent in volume by the end of 2020. Import disruptions have impacted a variety of industries, including manufacturing, retail, construction, and supply chains, to name a few. According to the WTO (2020), nearly all areas saw double-digit declines in trade volumes in 2020, with Asia and North America seeing the biggest drops in imports. Because of the intricacy of their value and supply chains, the electronics and automobile industries will be the hardest hurt. Nigeria, being one of the countries that rely on the importation of certain machineries, automobiles, and electronics, would undoubtedly be heavily hurt by the COVID-19 lockdown. As a result, the purpose of this study is to conduct a critical examination of the impact of shutdown on importation.
OBJECTIVES OF THE STUDY
The goal of this research is to conduct a thorough examination of the impact of lockdown on importation. It is specifically targeted at:
To look into the advantages of importing for businesses.
To determine the impact of the Covid-19 lockout on the product supply chain
To determine the extent to which the Covid-19 lockout has an impact on commercial activities.
RESEARCH QUESTIONS
H0: The covid-19 lockout has no effect on the supply chain of products and services.
H0: The covid-19 lockdown has no significant impact on importation.
SIGNIFICANCE OF THE STUDY
This research adds to the corpus of knowledge already available. It will also allow business owners to broaden their raw material procurement options locally. In the lack of imported automobiles and equipment, it would assist manufacturing sectors in improvising for locally created machines. It will raise awareness among policymakers and the government about the importance of providing loans to producers of locally produced raw materials, machinery, and automobiles in order to encourage them. It will also emphasize to general customers the need of purchasing Nigerian-made products rather than relying on imported goods.
SCOPE OF THE STUDY
The goal of this research is to conduct a thorough examination of the impact of lockdown on importation. Its goal is to look into the advantages of importing for businesses. It will also look into the impact of the Covid-19 lockdown on the product supply chain. It will also look into the extent to which the covid-19 lockdown impacted trade activities. However, as a sampled participant, the study is limited to the Nigerian Port Authority in Lagos State, Nigeria.
LIMITATION OF THE STUDY
Several challenges were encountered during the course of the research, including but not limited to the following. These are the ones.
Inadequate funding: The research was hampered by a lack of funds, which prevented the researcher from accessing banks in Lagos, as well as printing and collating questionnaires.
Time constraint: Another constraint is time, as this research had to be completed while also juggling other academic responsibilities, making it hard to conduct this study in a large, representative sample.
DEFINITION OF TERMS
COVID-19: Corona virus disease 2019 (COVID-19) is a sickness caused by a new corona virus known as SARS-CoV-2 (severe acute respiratory syndrome corona virus 2).
Lockdown: A lockdown is a policy that requires people or communities to remain in their current location owing to specific threats to themselves or others if they are allowed to travel and interact freely.
Importation: Importation is the purchase or acquisition of goods or services from a country or market other than one’s own.
The complete process of creating and selling commercial items is defined as a supply chain, which includes every stage from the supply of materials through the manufacture of the goods to their distribution and sale.
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