Financial Coping Strategies of Households during COVID-19 Induced Lockdown

Abstract

This paper focuses on the effect of the COVID-19 pandemic induced lockdown on the financial resources of households, their survival strategies and planned coping strategies. It employed the survey method of research in which 288 questionnaires were administered online and delivered by hand to respondents across the six geographical zones of Nigeria. The study used frequency and percentages to analyze the perceptions of households regarding their survival strategies, government supports and the effectiveness of compliance to government’s orders. The questionnaire was designed to elicit relevant information regarding how households coped with the COVID-19 induced lockdown in Nigeria. It was found that most households had no contingency savings to address such emergencies; therefore, the lockdown put a lot of strain on the personal income and savings of households. It was also found that household rating of government supports was very poor which led to partial compliance with the stay-at-home order. Finally, it was found that the most preferred coping strategy was to take salary advance, followed by going back to work and borrowing. The study recommends contingency savings habit to households and controlling inflation rate to the government as important steps for returning towards normality. The government of Nigeria needs to prioritize the health sector in budget allocation for proper healthcare delivery. The study also recommends contingency savings habit to households and social inclusion to government along with giving out bailouts to households, firms and industries to boost the economy.