COVID-19 PANDEMIC AND NIGERIA’S INTERNATIONAL LIQUIDITY: IMPACT ANALYSIS

Abstract

Covid-19 pandemic woes have caught across almost every international activity in the world today, which makes many economies to be in a cross-road whether the COVID-19 pandemic is the cause of these woes or not. In this regard, this study investigated the effect of the COVID-19 pandemic on international liquidity in Nigeria. COVID-19 pandemic was proxied by COVID-19 new cases and new deaths of the pandemic in Nigeria and a dummy which represented the period of the pandemic, and as such, stood in as the explanatory variables in the study, while international liquidity was put as the dependent variable. Daily data sets were sourced from National Centre for Disease Control in Nigeria and the Central Bank of Nigeria statistical bulletin between February and October 2020, employing Auto-Regressive Distributed Lag (ARDL) technique. Findings of the study revealed that, in the short run, the COVID-19 pandemic period had a significant impact on Nigeria's international liquidity. However, the COVID-19 new cases and new deaths could not have any significant impact on the international liquidity. Moreover, none of the COVID-19 pandemic variables could have any long-run impact on the international liquidity in Nigeria. The study, therefore, suggests that Nigerians should know that the depletion of its foreign reserve is not due to policy deficiency but to the COVID-19 pandemic. Also, the government should try to improve quality exports that will be demanded by foreign countries irrespective of any pandemic.