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