ISSN: 2222-6990
Open access
The study examines the impact of COVID-19 Pandemic on Liquidity and Profitability of Firms in Nigeria. The study is vital as it portrays the extent to which COVID-19 Pandemic has influenced the Liquidity and Profitability of Firms in Nigeria. In order to determine the relationship between COVID-19 Pandemic and Firms Liquidity & Profitability, some key proxy variables were used in the study, namely Liquidity Ratio (LR), Return on Equity (ROE) while COVID-19 Pandemic was proxy by Pre COVID-19 Pandemic Period (2017-2018) and During COVID-19 Pandemic Period (2019-2020). Two hypotheses were formulated to guide the investigation and the statistical test of parameter estimates was conducted using Wilcoxon statistical test tool. The research design used is Ex Post Facto design and data for the study were obtained from the NSE Factbook. The findings of the study show that COVID-19 Pandemic has significantly affected the Liquidity and Profitability of Firms in Nigeria at 5% level of significance. This goes further to confirm that government-imposed partial and total lockdowns during COVID-19 Pandemic increasingly hindered firms access to inputs at the local markets, difficulty in exporting and importing goods which affected both the firms liquidity and profitability negatively. Based on this, the study recommended for government to strengthen its support for local provision of raw materials since COVID-19 outbreak has greatly affected the importation of raw materials necessary for production from China in particular and other countries in general. Thus could make resource input required for production available which could enable firms maintain optimal liquidity and in turn improve firms’ profitability.
Abd. Hamid, S., Abdul Aziz, T., Dora, K., & Said, I. (2017). Intellectual capital disclosure and firms performance in France. Journal of Economics, Finance and Management Sciences, 4(2), 95-111.
Addi, R. A., Benksim, A., Amine, M., & Cherkaoui, M. (2020). Asymptomatic COVID-19 infection management: The key to stopping COVID-19, Journal of Clinical and Experimental Investigations, 11(3), 1-2.
Adegboye, O. A., Adekunle, A. I., & Gayawan, E. (2020). Early Transmission Dynamics of Novel Coronavirus (COVID-19) in Nigeria, International Journal of Environmental Research and Public Health, 17(9), 3054.
Adenomon, M. O., & Maijamaa, B. (2020). On the Effects of COVID-19 outbreak on the Nigerian Stock Exchange performance: Evidence from GARCH Models.
Akinsulire, O. (2013). Financial management, (4thed), Nigeria: Ceemol Nigeria Limited
Akinyomi, O., & Tasie, C. (2011). Effect of working capital management on the profitability of Nigerian manufacturing firms, International Journal of Management and Enterprise Development, 8(1), 57-62
Anyanwu, J. C. (2003). Monetary Economics: Theory, Policy and Institutions, Benin City: Hybrid Professional Publishers Ltd,
Bai, Y., Yao, L., Wei, T., Tian, F., Jin, D, Y., Chen, L., & Wang, M. (2020). Presumed asymptomatic carrier transmission of COVID-19. JAMA
Baret, S., Celner, A., O’Reilly, M., & Shilling, M. (2020). Covid-19 potential implications for the banking and capital markets sector, Maintaining business and operational resilience. Deloitte Insights.
BCBC. (2019). Basel committee on banking supervision; banks for international settlement, basel III monitoring reports
Brockman, T. (2015). Social corporate disclosure and firms performance, evidence from list manufacturing firms’ in Italy. Journal of Science, 4(9), 45-52.
Demirgue-Kunt, Pedraza & Ruiz. (2020). Banking sector performance during the Covid -19 crises. The World Bank Policy Research working paper series, 9363.
Hope, O., Saidu, M., & Success, A. (2020). Coronavirus pandemic outbreak and firms performance in Nigeria, Management and Human Resource Research Journal, 9(4), 15-25
Iwedi, M., Kocha, C. N., & Onakpono, A. E. (2020). Covid-19 pandemic, global trade wars and impact on the Nigeria Economy. Academic Journal of Current Research, 7(5), 71-82.
Jacob, O. N., Abigeal, I., & Lydia, A. E. (2020). Impact of COVID-19 on the Higher Institutions Development in Nigeria, Electronic Research Journal of Social Sciences and Humanities, 2, 126-135.
Kocha, C., Iwedi, M., & Barisua, S. (2020). COVID-19 outbreak, oil price shock and banking system liquidity: the Nigeria Evidence, Greneer Journal of Economics and Accountancy, 8(1), 6-11
Malik, M., Waseem, J., & Kifayat, U. (2011). Working capital management and profitability an analysis of firms of textile industry of Pakistan, Journal of Managerial Sciences 6(2), 155-165
Mert, T., & Omer, S. G. (2020). The impact of COVID-19 on emerging stock markets, Finance Research Letter 36, 1-6
Nahiba, M. (2017). Non financial disclosures and performance of manufacturing firms in India, Journal of Empirical Literature, 7(9), 21-29.
NCDC. (2020) First Case of Corona Virus Disease Confirmed In Nigeria https://ncdc.gov.ng/news/227/first-case-of-corona-virus-disease-confirmed-in-nigeria retrieved on May 11, 2020
Nigeria Bureau of Statistics. (2019). Statistics on COVID-19 Pandemic in Nigeria
Nuhu, S. (2020). The impact of the Covid-19 on the financial markets: Evidence from China and USA, Electronic Research Journal of Social Sciences and Humanities, 2(2), 2706-8242)
Nzotta, S. M. (2004). Money, Banking and Finance: Theory and Practice (2nded.). Owerri: Hudson-Jude Nigeria Publishers.
Obim, E. N., Takon, S. M., & Mgbado, M. U. (2020). The impact of liquidity on banks profitability in Nigeria, International Journal of Banking and Finance Research, 6(1), 1-8
Ofor, N., Omaliko, E., & Okoli, C. (2017). Effect of TSA on the performance of MDAs in Nigeria, Trendy Economics and Management, 29(2), 59-67
Ohia, C., Bakarey, A. S., & Ahmad, T. (2020). COVID-19 and Nigeria: Putting the realities in context, International Journal of Infectious Diseases
Okeke, N. (2015). Financial performance synergies, empirical review. European Accounting Review, 1(3), 55–59.
Oliveira, J., Rodrigues, L. L., & Craig, R. (2015). The level of risk management disclosure in Australia. Managerial Auditing Journal, 26(9), 817–839.
Omaliko, E., & Okpala, N. (2020). Effect of TSA on solvency of listed deposit money banks in Nigeria, World Journal of Finance and Investment Research, 5(1), 32-47
Raheman, Salleh, Afza and Chek, I. (2014). Non-Financial Information Disclosure Influence and its influence on Firms’ Profitability in Malaysia. International Journal of Academic Research in Accounting, Finance and Management Sciences, 4(4), 297-306
Rouf, A. (2016). Corporate governance disclosures and financial performance; evidence from listed firms in Japan. Journal of Finance, 2(3), 34-38
Taiwo, M. (2016). Treasury single account and cash flow of banks, Research Journal of Finance and Accounts, 6(2), 34-36
Tako, T. (2016). Implications of treasury single account on banking activities, Journal of Finance, 4(3), 23-25
Tesfaye, B. L. (2020). The impact of Covid-19 on the Ethiopian private banking system. Published PhD thesis of University of South Africa.
Wakode, S. (2020). Efficacious scrutinizing of COVID-19 impact on banking using credit risk metrics, International Journal of finance and Banking Research, 6(3), 51-56
World Health Organization. (2020). Coronavirus disease (COVID-19) pandemic, Retrieved June 16, 2020, from https://www.who.int/
Wuave, T., Yua, H., & Yua, P. (2020). Effect of liquidity management on the financial performance of banks in Nigeria, European Journal of Business and Innovation Research, 8(4), 30-44
Xinhuao. (2020). China Financial market remains stable and Covid-19 impact, China Daily-Hong Kong
In-Text Citation: (Amnim et al., 2021)
To Cite this Article: Amnim, O. E. L., Aipma, O. P. C., & C., O. F. (2021). Impact of Covid-19 Pandemic on Liquidity and Profitability of Firms in Nigeria. International Journal of Academic Research in Business and Social Sciences, 11(3), 1331-1344.
Copyright: © 2021 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode