IMPACT OF COVID-19 AND INTERSTATE BORDER CLOSURE ON ECONOMIC EFFICIENCY OF MICRO AND SMALL ENTERPRISES IN ANAMBRA STATE, NIGERIA

Abstract

This study examines the impact of inter-state border closure on the economic efficiency of micro and small-scale businesses in the Anambra State of Nigeria. The study specifically analyzes the economic efficiency of small businesses within the period under review and the factors that enhance or diminish such efficiency. Multi-stage, purposive and random sampling techniques were used in selecting 300 micro and small scale business owners from which data for the study were collected. Primary data collected with the use of a structured questionnaire were analyzed using the transcendental logarithmic stochastic frontier profit model in a single-stage maximum likelihood estimation procedure. Results show that size of the market, border closure, high cost of transportation, and infrastructure were highly significant determinants of economic efficiency for micro and small scale business owners during the period of Covid-19 pandemic while production technique and availability of raw materials were weaker but significant determinants of economic efficiency. Interest on loan repayment was non-significant. The individual economic efficiency indices range from 0.063 to 1.00 with a mean of 0.571. The study, therefore, recommends that government should make empowerment programs for the businesses under these categories a top priority with more emphasis on soft loan accessibility while opening the borders quickly to ease transportation of goods and services in order to save small businesses who are the greatest employers of labour from going into extinction.