COVID-19 and Nigeria's Economic Indicators: Evaluating the Impact on Growth Output, Inflation, Exchange Rate, and Foreign Direct Investment

A. Oti, N.D. Ugwu, V.I. Sol-Akubude, Charles Aronu

Abstract


The study examines the impact of COVID-19 on Nigeria's economic indicators, including growth output, inflation (HIR), exchange rate (EXR), and foreign direct investment (FDI). Using quarterly data from 2010 to 2021, the study establishes causal relationships among these variables and assesses their influence on growth output. The findings show a significant decrease in real gross domestic product (RGDP) during the second quarter of 2020, indicating the profound impact of the pandemic on Nigeria's economic growth. FDI also experienced a decline during this period, followed by a slight recovery in early 2021. The study identifies a bi-directional relationship between RGDP and FDI, emphasizing their interdependence. A model developed in the study effectively explains the variability in RGDP, providing valuable insights for decision-making. A structural break in the first quarter of 2019 highlights the pandemic's significant influence on Nigeria's economic growth. Recommendations include prioritizing diversification by developing non-oil industries and implementing measures to facilitate economic recovery and attract investment. These recommendations aim to reduce vulnerability to future crises and address issues like corruption and inconsistent regulations. In conclusion, the study contributes to understanding the impact of the pandemic and offers actionable recommendations for policymakers and stakeholders.


Keywords


COVID-19, Growth output; Inflation; Exchange rate; Foreign direct investment; Structural break

Full Text:

PDF

References


Adedokun, S. A., & Fasoye, K. (2021). Covid-19 Effects on Manufacturing Sector in Nigeria. Journal of Development Economics and Finance, 2(1), 119-126.

African Development Bank. (2020). African Economic Outlook 2020: Supplement Amid COVID-19. AfDB.

Agyei, S. K., Bossman, A., Asafo−Adjei, E., Asiamah, O., Adela, V., Adorm−Takyi, C., "Exchange Rate, COVID-19, and Stock Returns in Africa: Insights from Time-Frequency Domain." Discrete Dynamics in Nature and Society, vol. 2022, Article ID 4372808, 20 pages, 2022. https://doi.org/10.1155/2022/4372808

Amoako, F. O. B., Donkor, H., Kwarteng, E., & E. Fordjour. (2022). Economic Impact of the COVID-19 Pandemic on the Oil and Gas Sector in Ghana. Paper presented at the SPE Nigeria Annual International Conference and Exhibition, Lagos, Nigeria, August 2022. Paper Number: SPE-211911-MS. https://doi.org/10.2118/211911-MS

Aronu, C. O., Ekwueme, G. O., Sol-Akubude, V. I., & Okafor, P. N. (2021). Coronavirus (COVID-19) in Nigeria: Survival rate. Scientific African, 11, e00689. https://doi.org/10.1016/j.sciaf.2020.e00689

Aronu, C. O., Otty, N. U., Ehiwario, J. C., & Okafor, P. N. (2020). The Impact of the Lockdown Measure on the Confirmed Cases of the Novel Coronavirus (COVID-19) in Nigeria. Journal of Scientific Research & Reports, 26(6), 110-119.

Chow, G. C. (1960). Tests of Equality between Sets of Coefficients in Two Linear Regressions. Econometrica, 28(3), 591–605.

Chowdhury, K. B., & Garg, B. (2022). Has COVID-19 intensified the oil price–exchange rate nexus? Economic Analysis and Policy, 76, 280-298. https://doi.org/10.1016/j.eap.2022.08.013

ElKadhi, Z., Elsabbagh, D., Frija, A., Lakoud, T., Wiebelt, M., & Breisinger, C. (2020). The impact of COVID-19 on Tunisia’s economy, agri-food system, and households. MENA Policy Note 5. International Food Policy Research Institute (IFPRI). https://doi.org/10.2499/p15738coll2.133737

Granger, C. W. J. (1969). Investigating Causal Relations by Econometric Models and Cross-spectral Methods. Econometrica, 37(3), 424–438.

Ilesanmi, F. F., Ilesanmi, O. S., & Afolabi, A. A. (2021). The effects of the COVID-19 pandemic on food losses in the agricultural value chains in Africa: The Nigerian case study. Public Health in Practice, 2, 100087. https://doi.org/10.1016/j.pu

Inegbedion, H. (2021). Impact of COVID-19 on economic growth in Nigeria: Opinions and attitudes. Heliyon, 7(5), e06943. https://doi.org/10.1016/j.heliyon.2021.e06943

International Monetary Fund. (2020). World Economic Outlook, October 2020: A Long and Difficult Ascent. IMF.

National Bureau of Statistics. (2021). Consumer Price Index Report February 2021. National Bureau of Statistics.

UNCTAD. (2020). World Investment Report 2020. UNCTAD.

UNCTAD. (2021). World Investment Report 2021. UNCTAD.

World Bank. (2020). Africa's Pulse: Charting the Road to Recovery. Retrieved from https://www.worldbank.org/en/region/afr/publication/africas-pulse

Zhang, L., Sindakis, S., Dhaulta, N., & Asongu, S. (2023). Economic Crisis Management During the COVID-19 Pandemic: The Role of Entrepreneurship for Improving the Nigerian Mono-Economy. Journal of Knowledge Economy, 1-17.


Refbacks

  • There are currently no refbacks.


Copyright (c) 2023 The Journal of Applied Sciences Research

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.