Econometric Modelling of Macroeconomic Interdependencies and the Impact on Nigeria’s Economic Growth Amidst the Covid-19 Pandemic

Abstract

This paper dwelt on the investigation of the impact of COVID-19 on economic growth of Nigeria with reference to crude oil price, crude oil export and naira/dollar exchange rate as macroeconomic indicators. The pre and during COVID-19 periods were represented by dummy variables (0, 1). Six years of monthly data ranging between 2016 and 2021 were obtained from the CBN and NBS bulletin. The ARDL model was calculated using the e-view programme. The findings revealed a long-term cointegration between the variables under consideration. There was a significant association established in the short term between the lagged dependent variable, exchange rate, and dummy variable at a 1% level of significance. However, the crude oil price had no significant impact on the model over the study period. According to these findings, the government should diversify its focus by investing more in non-traditional sectors, particularly the service and agricultural sectors. Over-reliance on crude oil exports should be decreased, as the pandemic has highlighted the importance of being prepared for unexpected events and having a resilient economy. Nigeria can reduce its vulnerability to external shocks and boost economic growth by researching and developing in other areas. The epidemic acts as a wake-up call to prioritise diversification and resilience in the face of future uncertainties.