The Economic Consequences of the COVID-19 Pandemic in Nigeria

European Xtramile Centre of African Studies, WP/20/042 (2020)

24 Pages Posted: 30 Jun 2020

See all articles by Adesoji Farayibi

Adesoji Farayibi

Centre for Allied Research and Economic Development (CARED); University of Ibadan, Ibadan, Nigeria

Simplice Asongu

African Governance and Development Institute

Date Written: June 29, 2020

Abstract

The COVID-19 pandemic has generated shocks that have caused economic fluctuations globally, calling for an understanding of the behaviour of macroeconomic variables. This study presents an early review of the macroeconomic impact of the Covid-19 pandemic in Nigeria. The aggregate supply and aggregate demand (AS-AD) model provides the theoretical motivation for the study. From the findings, while the number of infected cases reflects significant correlations with economic activity from the perspective of a trend analysis, the estimates from dynamic ordinary least squares (DOLS) show that nexuses between the number of confirmed cases and attendant macroeconomic outcomes are largely insignificant with the expected signs. The study has therefore shown that the COVID-19 pandemic has insignificant negative impacts on basic macroeconomic variables in Nigeria such as inflation, employment, exchange rate, GDP growth, among others. In other words, time is required before the established correlations withstand empirical scrutiny in terms of causality. As the government has engaged the Economic Sustainable Plan (ESP, 2020), which is a post-COVID-19 recovery plan, it is hoped that the attendant policies would be properly implemented so as to provide the critical mass to repositioning the country’s economy on the path towards inclusive and sustained economic development.

Keywords: Corona Virus, Macroeconomics Effects, COVID-19, AS-AD Model, Community Transmission, Nigeria

JEL Classification: E10, E12, E20, E23, I10, I18

Suggested Citation

Farayibi, Adesoji and Asongu, Simplice, The Economic Consequences of the COVID-19 Pandemic in Nigeria (June 29, 2020). European Xtramile Centre of African Studies, WP/20/042 (2020), Available at SSRN: https://ssrn.com/abstract=3637668 or http://dx.doi.org/10.2139/ssrn.3637668

Adesoji Farayibi

Centre for Allied Research and Economic Development (CARED) ( email )

Ibadan, Oyo State
Nigeria

University of Ibadan, Ibadan, Nigeria ( email )

Ibadan, Nigeria
Ibadan, Nigeria
Ibadan
Nigeria

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

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