THE RELATIONSHIP BETWEEN POVERTY AND ECONOMIC GROWTH IN NIGERIA

CHAPTER ONE INTRODUCTION 

Background of the study

Poverty is a global threat, plaguing both developed and developing nations. It has a devastating effect on developing nations generally but sub-Saharan Africa in particular (Addae-Korankye 2014). Poverty has become pervasive in Nigeria in the last four decades despite the economic boom of the 1970s (Anyanwu 1997; Mohammed-Hashim 2008; Obi 2007). Similarly, it was discovered that about 60% of Nigerians live in poverty despite the country’s enormous oil wealth (Sadiq 2007). It can be argued that poverty varies from one subgroup to another such that poverty is seen in all its manifestations and its magnifications as antithetic to economic growth (Rodrigues 2009).

Globally, poverty has been recognised as a major blemish in developing economies ever since economists began to take interest in the third world (Killick 1981). On the whole, the Nigerian economy depends so much on the exportation of oil that nearly all its budgetary revenues come from oil earnings sold in the international market. In 1973, most economic indicators such as real per capita income, real wages and private consumption were positively impacted by the first oil shock, which caused a dramatic increase and sharp rise in them. Similarly, income inequalities between urban and rural areas increased sharply, primarily because of the oil boom and its spin-offs (Anusionwu & Diejomoah 1981). However, the international price of oil decreased or fell constantly between 1980 and 1985 and brought about worsening economic conditions; there was a sharp fall in the standard of living and the biting hand of poverty was ushered in as a leading problem in Nigeria (Okunmadewa 1996). To this end, the oil boom was recognised to have contributed immensely to the large appreciation of the Nigerian naira, which subsequently caused adverse effects to agriculture as a non-oil tradable that had been the mainstay of the Nigerian economy.

In Nigeria, the nature of the determinants of poverty can be traced to low or declining level of economic growth, income inequalities, unemployment, corruption, bad governance, diversion of funds into non-developmental projects, fund embezzlement, inappropriate macroeconomic policies, inadequate endowment of human capital, debt or borrowing, labour market deficiencies that were caused by limited growth in job creation, low productivity, low wages in the informal sector and poor development of human resources. Poverty can also arise through structural deficiencies such as environmental degradation, worker retrenchment, frequent and increasing crime rates and violence, decrease in the real value of safety nets, structural changes in the family as well as the neglect of the agricultural sector, non-development of infrastructural facilities, lack of enabling environment for infant industries, epileptic power supply, depreciation of the Nigerian currency (naira) and the military government’s inability to properly manage the Nigerian economy (Ajakaiye & Adeyeye 2001; NPC 2004; Ogwumike 2001).

Poverty became prevalent in Nigeria beginning in 1985 and was seen as an obstacle or limitation to economic growth because poverty was measured based on the world standard of $1 per day and $2 per day. International prices were adjusted for local currency such that purchasing power parity conversion factors were employed to compute the depth of poverty as well as its prevalence in Nigeria (Obadan & Odusola 2001). The poverty gap calculated on the basis of $1 and $2 per day as the mean shortfall below the poverty line indicated that 70.2% and 90.8% of Nigerians, respectively, earned income that put them below the poverty line in a survey conducted in 1992–1993. During the same period, the poverty gap computed at $1 and $2 per day was 34.9% and 59.0%, respectively (Mohammed-Hashim 2008; World Bank 2001). In 2010, the World Bank defined or readjusted the international poverty line of $1 equivalent in 2001 to a new international poverty line of $1.25 per day in US prices (World Bank 2011). Generally, poverty brings about impaired access to resources, reducing the capability of individuals to enjoy an improved quality of life, which might have been converted from available productive resources (Adeyeye 1999; Ogwumike 2001; Sen 1997). On the other hand, poverty persists as a result of inefficient employment of common resources, occurring because of a weak policy environment and inadequate infrastructure, as well as a lack of access to improved technology. Other causes include the non-availability of credit instruments and exclusion of ‘problem groups’ from participating in the democratic process. Thus, widespread poverty and an over-reliance on earnings from oil might have hindered economic growth in Nigeria.

In spite of the strong growth rate in Africa’s second largest economy, poverty has kept rising in Nigeria to the extent that about 100 million of her citizens live below the poverty line of $1 per day (Daniel 2011). The proportion of Nigerians who were absolutely poor rose from 54.7% in 2004 to 69.9% in 2010 (National Bureau of Statistics [NBS] 2011; Omoniyi 2016). Nigeria’s economy is projected to continue to grow, but poverty is likely to get worse as the gap between the rich and poor continues to widen on a daily basis. This is why Kale (2012) considers poverty to be a paradox in which a higher proportion of Nigerians continue to live in poverty in spite of the continued enormous growth in the Nigerian economy year by year. To this end, the NBS (2010) reported that 112 518 507 million lived in relative poverty while it put Nigeria’s population at 163 million. It went further to compare this figure with Uganda, where only 28 million were poor; this is an indication that there are about four times as many people living in poverty in Nigeria as in Uganda. This shows that Nigeria has failed using all standards of poverty measurement including the relative poverty index. The various poverty measures in Nigeria pose different profiles; for instance absolute poverty puts it at 60.9%, 61.2% for $1 per day, 93.9% for the subjective measure while a recent survey conducted by Harmonized National Living Standard put the poverty profile at 69.0%. The much-celebrated gross domestic product (GDP) growth rate that averaged 7.4% in the last 10 years becomes questionable. Additionally, Nigeria’s Gini coefficient was 0.268 in 1980, 0.295 in 1990, 0.430 in 2004, 0.490 in 2009 and 0.834 in 2012 (Nwagwu 2014; UNDP 2009; World Bank 2014a). Similarly, the Human Development Index for Nigeria during the same period was 0.46 in 2004; it increased to 0.49 in 2009 and further increased to 0.51 in 2012 (UNDP 2011; 2013; World Bank 2014b; World Data Atlas 2015). These figures show that income inequality and human capital development increased in Nigeria during the period covered by this article.

This succinctly shows that there is a sharp disconnect between poverty and growth because the majority became poorer through exclusion. It is therefore necessary to mention that what is needed to fight the biting hand of poverty and ensure that poverty is banished, is a holistic attempt. This can only come through the adoption of macroeconomic policies of all-inclusive growth nationwide, to which it seem no adequate attention has been given by previous studies. The objectives of this article are to examine the relationship between poverty and economic growth, to analyse the determinants of economic growth and to establish the causes or determinants of poverty in Nigeria. The rest of this article is divided into four sections: a section dealing with a review of the literature, one to present the methodology of the study, one to discuss the results and finally the conclusion and recommendations.

Statement of the Problem

Many Economists would argue that igniting economic growth and sustaining it is the surest and most sustainable way to fight poverty. Cross-country studies on economic growth and poverty reduction indicate that a 1% increase in growth has been associated on average with a 1.5% reduction in poverty (Hasan, Mitra and Ulubasoglu, 2007). The Asian Development Bank (ADB) (2004) report stated that there is a great deal of variation in how much economic growth has reduced poverty across countries and even within countries over different periods of time. In statistical terms, the report noted that variation in economic growth can explain only around 45% of the variation in poverty reduction. These two  ―stylized facts‖  about growth and poverty linkages  – that poverty reduction is closely associated with economic growth but that this association is by no means perfect suggests two challenges for policymaker (Hasan et. al., 2007). According to author, first what are the policies that can ignite and thereafter sustain growth? Second, how does one ensure that growth generates significant opportunities for the poor?

To date, poverty situation in Nigeria remains a paradox, at least from two perspectives. Firstly, poverty in Nigeria is a paradox because the poverty level appears as a contradiction considering the country‘s immense wealth. Secondly, poverty situation has worsened despite the huge human and material resources that have been devoted to poverty reduction by successive governments in Nigeria with no substantial success achieved from such efforts (Oyeranti and Olayiwola, 2005). According to the authors, since poverty remains a development issue, it has continued to capture the attention of both national governments and international development agencies for several decades. Since the mid 1980s, reducing poverty has become a major policy concern for governments and donor agencies in all poverty stricken countries, Nigeria inclusive. Thus, to attain the objective of reducing poverty in Nigeria, the preoccupation of the government has been the growth of the economy as a pre-requisite for improved welfare. To this effect the government therefore initiated several economic reform measures which include Economic Stabilization measures of 1982, Economic Emergency Measures in 1985 and Structural Adjustment Programme (SAP) in 1986. Components of SAP include market- determined exchange and interest rates, liberalized financial sector, trade liberalization,                                        commercialization    and privatization of a number of enterprises (Aigbokhan, 2008).Specialized agencies were also established to promote the objective of poverty reduction. These include Agricultural Development Programmes, Nigeria Agricultural, Cooperative and Rural Development Bank, National Agricultural Insurance Scheme, National Directorate of Employment, National Primary Health Care Agency, Peoples Bank, Urban Mass Transit, mass education through Universal Basic, Education (UBE), Rural Electrification Schemes (RES) among others (Adigun, Awoyemi and Omonona, 2011). The recent effort is based on the seven point agenda. Like earlier reform packages, the strategy considers economic growth as crucial to poverty reduction. The major issues of  the seven point agenda include: power and energy, food security, wealth creation and transportation. Others are land reforms, security and mass education.

 

There may have been increased polarization in income distribution, resulting in a wider gulf between the poor and the rich, manifested in a disappearing middle class in the Nigerian economy. Despite policy interventions in the past to correct this abnormality, income inequality has increased the dimension of poverty (Oyekale, 2007). Additionally, attention to the importance of income distribution in poverty reduction seems to be growing. Whether growth reduces poverty, and whether in particular, growth can be deemed to be ―pro-poor‖, depends, however, on the impact of growth on inequality and on how much this impact on inequality feeds into poverty (Araar and Duclos, 2007).

The rate of rising poverty in Nigeria has led to a number of empirical researches to understand the link between economic growth and poverty reduction. These research works (for example Adigun ,et al.2011, Akanbi and Du Toit, 2009; Orebiyi, 2008 and Osunubi, 2006) however, are one sided in the sense that they particularly focused on how various government policies affect poverty reduction and not if the growth performance are pro-poor. The argument in the theoretical literature on whether a country should focus on achieving growth and thereafter ensure that the pattern of its growth is pro-poor or focus on reducing poverty by ensuring that this will lead to growth is still unclear and therefore requires further empirical works especially for the case of Nigeria. This study is therefore designed to fill these gaps by attempting to address the following research questions: why has the rate of poverty been so high in Nigeria despite record increase in economic growth? What is the nature of relationship between poverty and Economic growth in Nigeria? If recorded economic growth cannot be translated into improved living condition of the poor, what other measures of policy can be explored to reduce poverty and how?

Objectives of the Study

The main objective of this study is to explore the linkages between poverty and  economic growth in Nigeria. The specific objectives are:

i To ascertain if recorded economic growth in Nigeria translated into poverty reduction ii To assess if growth is pro-poor in Nigeria.

Research hypotheses

Based on the objectives outlined above, the following hypotheses therefore were formulated for this study:

Ho₁ Recorded economic growth does not translate into poverty reduction in Nigeria Ho₂ Growth in Nigeria is not pro-poor

Scope of the study

This study is limited to the Nigeria economy for the period 2004-2008, it uses Nigerian households‘ survey for two periods 2003/2004 and 2008 to make an ex-post analysis of changes in poverty.

Significance of the study

This research would contribute to the ongoing policy debate by identifying growth patterns of the Nigerian economy and to what extent the poor benefit from economic growth. In order to achieve this, it uses Nigerian households‘ survey for two periods 2003/2004 and 2008 to make an ex-post analysis of changes in poverty. It therefore employs Kakwani, Khandker and Son (2004) framework called Poverty Equivalent Growth Rate (PEGR) measure which utilizes unit record data available for two periods. This measure of pro-poor growth according to the authors, captures a direct linkage (or monotonic relation) with poverty reduction, indicating that poverty reduction takes into accounts not only growth but also how benefits of growth are shared by individuals in society. Therefore, a pro-poor growth measure that satisfies the monotonicity axiom implies that the magnitude of poverty reduction should be a monotonically increasing function of the pro-poor growth rate.

 Limitations of the Study

Although the research has reached its aim, there were some unavoidable limitations. First because of time limit, this research was conducted using 1996-2004 Nigerian Living Standard Household Survey (NLSS) data. The study should have included 2008 NLSS but the data released then by the Federal Bureau of Statistics required some statistical amendments to be used for empirical study. The use of Poverty Equivalent Growth Rate (PEGR), instead of the usually Additively Decomposable Growth Rate measures resulted in the delay of the project completion in order to get acquainted with the software application.

Organizations of the Study

The paper is organized as follows: Following the introduction in chapter one is the literature reviews in chapter two, which include theoretical and empirical literatures. Chapter three is for methodology, the model of Pro-Poor growth, applying of additively decomposable poverty measures and Poverty Equivalent Growth Rate (PEGR) measures, calculating of PEGR and data sources, while chapter four consists of data analysis and presentations of the results. Chapter five contains summary, conclusion and recommendations

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THE IMPACT OF EXCHANGE RATE VOLATILITY ON SELECTED MACROECONOMIC VARIABLES IN NIGERIA

ABSTRACT

Fluctuation in exchange rate has been a recognized catalyst that brings about change in other macroeconomic indicators. This phenomenon was underscored by series of mechanisms through which economic activities of a given country reflect on its exchange rate to other international currencies. In order to assess the empirical influence of rising fluctuation in exchange rate, this study focused on the impact of exchange rate volatility (EXV) on selected macroeconomic variables in Nigeria which included gross domestic product (GDP), foreign direct investment inflow (FDI), index of trade openness (TOP) and inflation rate (INF). The Autoregressive Distributed Lag model (ARDL) and Vector Error Correction Model (VECM) were used in the study. Annual time series data from 1981 to 2015 were obtained from the Central Bank of Nigeria Statistics Bulletin 2015. Having carried out necessary pre- and post diagnostic tests, the results show that increase in exchange ratevolatility significantly decreased gross domestic product by about 0.003 per cent on average per annum. There is further evidence of short run and long run significant positive effect of exchange rate volatility on trade openness. Although EXV has both negative and positive relationship with FDI in the long run and short run respectively, its effect was considered insignificant. Similarly, EXV has insignificant positive effect on inflation rate. Lastly, while there is evidence of short run unidirectional causality from EXV to GDP and TOP respectively, the study found cases of independence between EXV and FDI on one hand and EXV and INF on the other hand. Above key findings led to the study’s conclusion, among other things, that exchange rate volatility is one of the major determinants of gross domestic product growth in Nigeria. As such, it was recommended that adequate effort should be made to minimize fluctuation in exchange rate through necessary fiscal and monetary policy as well as close monitoring of key players in the foreign exchange market

 ECONOMETRICS PROJECT TOPICS AND MATERIALS

CHAPTER ONE INTRODUCTION

1.1 Background of the Study

Exchange rate is the price of one country’s currency in relation to another country`s currency. It is the ratio between a unit of one currency and the amount of another currency for which that unit can be exchanged at a particulartime.Exchange rate is a key macroeconomic measure in the context of general economic reform programmes and its management has been a contemporary issue among academics and policy makers in recent time. For instance, the relationship between exchange rate and economic growth is of a crucial issue from both descriptive and policy perspectives. It is therefore not surprising that exchange rate is among the most watched, analyzed and government manipulated macroeconomic variable.

The extent to which exchange rate is managed can affect the growth and development of such country. As succinctly stated by Edwards (1994),it is not an understatement to postulate that the behaviour of exchange rate occupies an important position in government policy evaluation and design. Aron, Elbadawi and Kahn (2002)expressed that exchange rate has direct influence on employment, trade flow, balance of payments and the arrangement of production and consumption. On the other hand, exchange rate is an important determinant of the growth of cross-border trading of a country and it serves as a measure of its international competitiveness.

One of the most important aspects of currency exchange rates is the fluctuation in the value of a currency with respect to another. The value of a given currency rises and falls with supply and demand of that currency, which in turn, determines the exchange rate.Exchange rate movements have been a big concern for the public sector, foreign investors and private individuals since the collapse of the Bretton Woods system. In Nigeria, this system was replaced by a flexible exchange rates systemwith the introduction of the Structural Adjustment Progra-mme (SAP) of 1986in which the price of currencies was determined by the supply and demand of money. Thus, this led to the devaluation of naira and a free fall of naira against the United State dollar. Given the frequent changes of supply and demand influenced by numerous external factors, this new system increased the currency fluctuations (Grier & Mark, 2010).

According to Jhigan (2005), the variables that influence the exchange rate includes country’s exports, imports and structural influences. If country’s exports exceed imports, the demand for its currency rises and consequently, it has a positive impact on the exchange rate. On the other hand, if imports exceed exports, the desire for foreign currency rises and hence, exchange rate  for such country move-up. Undoubtedly, any measure that tends to increase the volume of exports more than the rate of import, will definitely raise the value of the domestic currency against other foreign currencies. Moreover, economies are getting more open with international tradingconstantly increasing and as a result, nations become more exposed to exchange rate fluctuations. Exchange rate volatility is the sensitivity of changes in the real domestic currency value of assets, liabilities or operating incomes to unanticipated changes in exchange rate (Dufour, 2010).

Fluctuations in exchange rates may have an adverse effect on macroeconomic variables such as inflation rate, unemployment, trade openness,economic growth rate, foreign direct investment (FDI) etc.Exchange rate uncertainty affects FDI through the channel that depreciation of the currency of host country against the home currency raises the relative wealth of foreigners thereby increasing the attractiveness of the host country for FDI as firms are able to acquire assets in the host country relatively cheaply. Thus a depreciation of the host currency should increase FDI in the host country, and conversely an appreciation of the host country’s currency should decrease FDI (Ullah, Haider & Azim, 2012).

Moreover, Exchange rate movements can influence domestic prices via their effects on aggregate supply and demand. On the supply side, exchange rates could affect prices paid by the domestic buyers of imported goods directly. In an open small economy (an international price taker), when the currency depreciates it will result in higher import prices and vice versa. Exchange rate fluctuations could have an indirect supply effect on domestic prices. The potentially higher cost of imported inputs associated with an exchange rate depreciation increases marginal cost and leads to higher prices of domestically produced goods (Hyder& Shah, 2004). Furthermore, import-competing firms might increase prices in response to an increase in foreign competitor price in order to improve profit margins. The extent of such price adjustment depends on a variety of factors such as market structure, nature of government exchange rate policy,  or product substitutability. Exchange rate variations can also affect aggregate demand. To a certain extent, exchange rate depreciate or appreciate foreign demand for domestic goods and services, causing increase or decrease in net exports and hence aggregate demand which may increase real output (Hyder & Shah, 2004). Furthermore, the expansion in domestic demand and gross  national product may increase input prices and accelerate wage demands by workers seeking higher wages to maintain real wages. The nominal wage rise may result in further price  increases.

There had been series of exchange rate policy reform by successive Nigerian government to promote macroeconomic stability and export growth. However, the effectiveness of these policies in achieving macroeconomic stability is questionable. The Nigeria exchange rate control Act was enacted in 1962. Though, the exchange rate system was in operation even before the establishment of the Central Bank of Nigeria in 1958. Before the enactment of exchange rate control Act of 1962 the foreign exchange earned by private sector were held in commercial  banks abroad. These commercial banks acted as agents for local exporters. However, due to the shortage in supply of foreign exchange between 1970 and 1980`s prompted the monetary authorities to initiate adequate measure in controlling the excessive demand of foreign exchange. Furthermore, a fixed exchange rate and a comprehensive exchange rate control were adopted in 1982. But the fixed exchange rate system was abandoned in September 26, 1986. This was because of the inability of the monetary authority to effectively control the increasing demand for foreign exchange to achieve internal balance.

The flexible and managed float regime was instigated in 1986 under the Structural Adjustment Programme (SAP). This policy allowed exchange rate to float freely and to be determined by market forces. The monetary authorities were intervening intermittently in the Foreign Exchange (FOREX) market to ensure stability of the rate. Also foreign exchange market (FEM) was adopted in 1987 to ensure favorable external balance and to preserve the value of domestic currency. This led to the establishment of Bureau de change in 1989 with the aim of enlarging the scope of FEM. The above policies could not resolve the high pressure on the foreign exchange market. This led to another policy reversal in 1994 which encompassed the formal pegging of the Naira exchange rate, the centralization of foreign exchange in Central bank of Nigeria (CBN) and the restriction of Bureau de change to buy foreign exchange as an agent of CBN.

In addition, the monetary authorities went further to introduce a guided deregulation policy in 1995 that led to establishment of Autonomous Foreign Exchange Market (AFEM). AFEM was later transformed into Inter Bank Foreign Exchange Market (IFEM) in 1999. The guided deregulation policy also failed and this led to the introduction of Dutch Auction System in 2002. The Dutch auction system was introduced to solve the problem of persistent increase in demand for foreign exchange and relentless depletion of the country`s external reverses (Obadan, 2006). Also in May 2016 the monetary authorities reintroduced a flexible exchange rate where  exchange rate is allowed to be determined by demand and supply of foreign currency. This development was as a result of the failure of fixed exchange to address foreign exchange rate problem. Even the recent adopted flexible exchange policy have worsen the Nigeria economy as foreign exchange rate continues to fluctuates on daily bases and prices of goods continues to inflate on a high rate.

There is an argument by some economists that the above depreciation is attributed to the decline in the nation’s foreign exchange reserves, fragile export and weak production base. In contrast others are of the veiw that the recent decline in naira is attributed to the activities of speculators and banks. These practices have led to the fluctuation and misalignment in the real exchange rate. Thus, there is need to examine the impact of exchange rate volatility on some selected macroeconomic variable.

Statement of the problem

The effect of exchange rate volatility on macroeconomic variables in Nigeria is a major issue. There is a general consensus that exchange rate volatility causes problems for aggregate economic performance.However there is less agreement on the relationship between exchange rate volatility, economic growth and how it affects economic activities at the macroeconomic level. This has generated significant debate both theoretically and empirically. The level of the country’s exchange rate volatility is no longer the only problem, but the fact that exchange rate volatility has reached a crisis stage. Since the introduction of the Structural Adjustment Programme (SAP) of 1986, exchange rate has become so volatile in Nigeria and the recent rate of exchange rate has been a cause of great concern to many as Figure 1.1 shows.

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CHAPTER ONE

INTRODUCTION

Background to the Study

This study analyses Convid-19 pandemic on entrepreneurship crisis: Nigeria experience and structural causes.. The COVID-19 pandemic has had far-reaching effects on the global economy (Ozili and Arun, 2020). It affected the global travel business, national health care systems, the food industry, events industry, education and global trade. Due to globalization, there are expectations of spillover effects to emerging and developing countries due to their dependence on developed countries for the importation of goods and services (Ozili and Arun, 2020). A recent literature has emerged that examine the effect of COVID-19 on economic activities (Fernandes, 2020; Atkeson, 2020; McKibbin and Fernando, 2020; Altig et al, 2020; Ozili and Arun, 2020). Yet, the recent literature has not examined the effect on COVID-19 on economic aggregates in developing countries such as Nigeria. The impact of COVID-19 on the Nigerian economy has not been explored in the recent literature. This study fills this gap in the literature.

Economic crises or recessions are often caused by market corrections (Hart and Tindall, 2009; Jones, 2016), market failure (Stiglitz, 2008; Chauffour and Farole, 2009; Petrakos, 2014), external trade and price shocks (Ros, 1987; Mendis, 2002; Gomulka and Lane, 1997; Francois and Woerz, 2009), political instability (Aisen and Veiga, 2013; Gasiorowski, 1995; Lagravinese, 2015), and civil unrest through protests (Bermeo and Bartels, 2014; Giugni and Grasso, 2016; Grasso and Giugni, 2016; Bernburg, 2016), amongst others.

Economic crises are not new in Nigeria. During the 2016 economic crisis, the monetary authority in Nigeria defended the local currency from forced devaluation against the dollar and adopted a managed-float foreign exchange system, which worked well from 2016 to 2019. After the 2016 economic crisis or recession, it was widely believed that the unexpected and sustained decline in oil price was the most important cause of economic crises in Nigeria. But in 2020, nobody thought that a public health crisis could trigger an economic crisis in the country. What made the 2020 economic crisis different from other economic crises or recessions in Nigeria was that most economic agents, who could have helped to revive the economy were unable to engage in economic activities due to fear of contracting the COVID-19 disease. Also, economic agents did not engage in economic activities when the government imposed and enforced its social distancing rules and movement lockdown in Abuja, Lagos and Ogun states on the 30th March of 2020.

Although the coronavirus outbreak which started in the Wuhan province of China had spillover problems in Nigeria, the reason why the outbreak was severe in Nigeria and caused suffering to poor citizens was because of weak institutions that were ineffective in responding to the pandemic and the lack of adequate social welfare programs that would have catered for majority of the poor citizens and vulnerable citizens who were affected by the crisis. The fear of financial and economic collapse led to panic buying, hoarding of foreign currency by individuals and businesses mostly for speculative reasons, flight to safety in investment and consumption, households stocking up on essential food and commodity items, businesses asking workers to work from home to reduce operating costs.

The analysis in this paper contributes to the literature that examine the cause of economic crises in developing and transition countries. This literature shows that the level of development in a country plays an important role in prolonging economic crises or in facilitating economic recovery. This study also contributes to the recent literature that investigate the impact of coronavirus in society (see., Chinazzi et al, 2020; Haleem et al, 2020; Chen et al, 2020; Fornaro and Wolf, 2020). This study contributes to this literature by exploring the factors that worsen the COVID-19 pandemic and the economic crisis in Nigeria.

Statement of the Problem

The world has been shocked by the outbreak of the Covid-19 pandemic. The World Health Organization (WHO) announced the outbreak of a new coronavirus (SARS-CoV-2) at the beginning of the year 2020 (Adhikari et al., 2020; Congressional Research Service., 2020; Harapan, Itoh, Yufika, Winardi, Keam, Te, et al., 2020).  According to WHO, the disease was first reported in the city of Wuhan, China, in December 2019 (Adhikari et al., 2020; Adnan, Khan, Kazmi, Bashir, & Siddique, 2020; Unhale, Ansar, Sanap, Thakhre, & Wadatkar, 2020) and has since then spread like a wildfire to more than 190 countries (Congressional Research Service., 2020; Harapan, Itoh, Yufika, Winardi, Keam, Te, et al., 2020). In other words, the disease has become a global pandemic. The pandemic has caused massive economic disruptions across the globe. Economic experts have predicted that the pandemic could plunge the world into a global recession (Ozili, 2020). Also, the pandemic has claimed a significant number of lives across the globe.

 

Objectives of the study

The broad objectives of this study are to investigate Convid-19 pandemic and economic crisis: Nigeria experience and structural causes.

The study has the following specific objectives of the study;

1. To Analyze the economic factors associated with Covid-19 pandemic
2. Analyze the structural causes of Covid-19 in Nigeria economy
3. To investigate the impact of COVID-19 on the Nigerian business environment

Research Questions

1. What are the economic factors associated with Covid-19 pandemic?
2. What are the structural causes of Covid-19 in Nigeria economy?
3. What are the impact of  COVID-19 on the Nigerian business environment?

Scope of the Study

This study is on the Convid-19 pandemic economic crisis: Nigeria experience and structural causes , the researcher limited the scope to Covid-19 because it is the only recent pandemic that is currently ravaging the world as at the time of the study.

Significance of the Study

This study contributes to the recent literature that investigate the impact of pandemic in society (see., Chinazzi et al, 2020; Haleem et al, 2020; Chen et al, 2020; Fornaro and Wolf, 2020). This study contributes to this literature by exploring the factors that contributes to economic hardship during a pandemic

Limitations of the Study

Financial Constraints: The researcher was with limited funds, she cannot visit all the areas to get responses from respondents but she was able to get good information concerning the research topic.

Time Constraints: The researcher was involved in other departmental activities like seminars, attendance of lectures et.c which limited her time for the research but the researcher was able to meet up with the time assigned for the completion of the research work

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