The Impact of A Global Crisis on the Economic Sustainability of Nigeria: The Case of Covid-19 Pandemic

International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue VII, July 2021 | ISSN 2454–6186

The Impact of A Global Crisis on the Economic Sustainability of Nigeria: The Case of Covid-19 Pandemic

AJAYI Ibidolapo Ezekiel¹, EDEWUSI Damilola Gabriel² and ADELEKE Kareem Olalekan^3
1,2 Department of Finance, Ekiti State University, Ado-Ekiti, Ekiti State, Nigeria
³Department of Banking and Finance, Federal Polythenic, Ado-Ekiti, Nigeria

ABSTRACT
This study assessed the impact of a global crisis on the economic sustainability of Nigeria. The present study explored the effect of the exchange rate, oil price, and investment rate on the financial sustainability of Nigeria. It adopted the qualitative and quantitative research design in its approach. The study gathered quarterly time series data spanning from 2016 Q1 to 2020 Q2. Econometrics estimations, including ARDLco-integration analysis, parsimonious error correction model, and other post estimation tests, were used to analyze the study data. Findings from the study revealed that in the long run, exchange rate, oil price, and investment rate exert a positive impact on economic sustainability, and in the short run, exchange rate and oil price exert s negative impact on financial sustainability, while investment rate impact positively on economic sustainability. Following these findings, the study suggested that the Central Bank of Nigeria should maintain the stability of the exchange rate. The Government of Nigeria should switch the economy from a single or mono-economy, and the Central Bank of Nigeria should further improve financial inclusion.

Keywords: Global crisis, Economic sustainability, COVID-19, Exchange rate, Oil price, Investment rate

1.0 Introduction

This paper is not just coming at an appropriate time, but it is also vital considering the gravity of the anomaly faced by the global economy at a time like this.COVID-19, or the coronavirus is a new disease that has posed severe economic pressure to nations of the world; it was discovered in 2019 with no recent observation of the disease in humans (Wang & Zhou, 2020). The COVID-19 pandemic has continued to inflict suffering, especially with the consistent increase in macroeconomic variables, and most, unfortunately, the decline in oil price and investment has caused nations to strive to control the virus and equally sustain the prosperity that they used to possess (Adeyinka, Fadila, Bodam, Dansofo & Adetunji, 2020). It has been observed that economic crisis is usually occasioned by consistent market decline, market failure, price shocks, political instability, and civil disorder (Jones, 2016; Hart & Tindall, 2009; Francois & Woerz, 2009; Petrakos, 2014; Lagravinese, 2015; Giugni & Grasso, 2016; Bernburg, 2016).
Although economic crises or recessions are almost expected in Nigeria (Ozili, 2020), following her previous experiences, in 2016, the recession caused the Central Bank of Nigeria to ensure the local currency did not devalue against the dollar with the adoption of a

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