An Analysis on the Impact of Covid-19 Pandemic on Nigeria economy (2020 (original) (raw)
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The Economic Effect of the Covid-19 Epidemic on Nigeria Economy
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Many studies on the impact of COVID-19 are often discussed in developed countries, stressing a gap in understanding how the pandemic impacts developing countries. This study focuses on the coronavirus called COVID-19 situation in Nigeria and its economic impact on the economy. The study also examines the structural causes that worsen the COVID-19 crisis in Nigeria. Our findings reveal that the economic downturn in Nigeria was triggered2 by a combination of declining oil prices and spillovers from the COVID-19 outbreak, which led to a fall in demand for oil products and social distancing, economic activities halted from taking place. The government retort to the crisis was to provide financial assistance to businesses and a few households affected by the coronavirus outburst. The Federal Government of Nigeria approved accommodative economic strategies by offering a targeted ₦3.5trillion loan as support to some sectors of the economy. However, these efforts did not prevent the economic crisis from occurring, as expected. The Managers of the economy and agents could not freely engage in economic activities to fear contacting the COVID-19 disease that was spreading fast at the time.
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This study analyses the effect of COVID-19 pandemic on selected macroeconomic indicators in Nigeria, its effect on the economy and the structural factors that worsen the coronavirus (COVID-19) crisis. Using data from the Central Bank of Nigeria, and the World Bank, this study employs Johansen-Juselius multivariate cointegration techniques to estimate the relationship between exchange rate, crude oil price, inflation and economic growth in Nigeria. Findings reveal that the economic downturn in Nigeria was triggered by a combination of declining oil price, high rate of inflation, exchange rate and spillovers from the COVID-19 outbreak, which not only led to a fall in the demand for oil products but also stopped economic activities from taking place when social distancing policies were enforced. The government responded to the crisis by providing financial assistance to businesses and a small number of households that were affected by the coronavirus (COVID-19) outbreak. Therefore, the study recommended the need for government to build appropriate digital infrastructure to facilitate the transition from 'face-to-face' business activities to a 'digital or online' business activities, which can help to grow the digital economy.
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