Effect of COVID-19 Pandemic on the Nigerian economy

Abstract

This study employs the ARDL estimation method to investigate the impact of COVID-19 pandemic on Nigeria’s stock market using daily data from 23rd March to 29th May 2020. The results of the bounds test to cointegration indicate that a long-run relationship exist between the COVID-19 outbreak and stock market performance. The estimation results demonstrate that COVID-19 (proxied by the number of confirmed cases of infection, the number of deaths and lockdown) has a negative impact on stock market performance in the long-run and the short-run. The results of the stability test reveal that the relationship between COVID-19 pandemic and stock market is stable over the long-run. The study recommends policies to reduce the spread of the virus to lessen its negative impact on the stock market in Nigeria.