External shocks, Economic Resilience and Economic Growth in Sub-Saharan Africa Countries: A case study of Nigeria
Main Article Content
Abstract
The study examined external shocks, economic resilience, and economic growth in Sub-Saharan Africa (SSA) countries, using Nigeria as a case study for the period between 1990 and 2022. To achieve this objective, the study employed Fully Modified Ordinary Least Squares (FMOLS) to estimate the relationship after subjecting the series to preliminary testing. The findings revealed that external shocks had a significant impact on Nigeria's economic growth during the observation period. Specifically, it was found that oil price shocks had a significantly negative impact on Nigeria's economic growth, while global demand shocks had a significantly positive impact. However, the study did not find sufficient evidence to conclude that financial shocks had a significant impact on Nigeria's economic growth. Regarding the interactive terms, it was discovered that when economic resilience was interacted with all three measures of external shocks (oil price, global demand, and financial shock), there was a significant impact on economic growth. This implies that economic resilience alters the effect of external shocks on economic growth in Nigeria, both in sign and size. The implication is that policymakers in Nigeria should make efforts to develop and measure Nigeria's economic resilience to external shocks, subsequently making efforts to improve areas of weakness to strengthen Nigeria's level of resilience to external shocks, ensuring stable economic growth.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
References
Adeniyi, O., Oyinlola, A., & Omisakin, O. (2011). Oil price shocks and economic growth in Nigeria: are thresholds important?. OPEC Energy Review, 35(4), 308-333.
Akinsola, M. O., & Odhiambo, N. M. (2020). Asymmetric effect of oil price on economic growth: Panel analysis of low-income oil-importing countries. Energy Reports, 6, 1057-1066.
Aliyu, S. U. R. (2009). Impact of Oil Price Shock and Exchange Rate Volatility on Economic Growth in Nigeria: An Empirical Investigation. Research Journal of International Studies, 11(8), 4-15.
Briguglio, L. P. (2016). Exposure to external shocks and economic resilience of countries: evidence from global indicators. Journal of Economic Studies, 43(6), 1057–1078. doi:10.1108/jes-12-2014-0203
Fadiran, T. P. (2021). Monetary transmission mechanism, oil price shocks and economic growth of Nigeria. Acta Universitatis Danubius. Œconomica, 17(1), 209-226.
Hallam, B. S. (2022). Emerging market responses to external shocks: A cross-country analysis. Economic Modelling, 115, 105948. https://doi.org/10.1016/j.econmod.2022.105948.
Hatmanu, M., Cautișanu, C., & Ifrim, M. (2020). The Impact of Interest Rate, Exchange Rate and European Business Climate on Economic Growth in Romania: An ARDL Approach with Structural Breaks. Sustainability, 12(7), 2798. https://doi.org/10.3390/su12072798
Ikechi, K. S., & Anthony, N. (2020). Global oil price shocks and effects on economic growth: An econometric Investigation of Nigeria. International Journal of Innovation and Economic Development, Inovatus Services Ltd, 6(4), 7-26.
Jollès, M., Meyermans, E., & Vašíček, B. (2023). Determinants of macroeconomic resilience in the euro area: An empirical assessment of national policy levers. Economic Systems, 101093. https://doi.org/10.1016/j.ecosys.2023.101093
Joseph, T. E., Obikaonu, C. P. (2021). Economic growth and quality adjusted humancapital equation: moderating role of social capabilities in Africa. Applied Journal of Economics, Management, and Social Sciences, 2(2), 1-9
Joseph, T., Awolaja, O., & Ajibola, O. (2024). Measuring Sub-Saharan Africa economic resilience to external shocks: The role of adaptive policy space. Applied Journal of Economics, Management and Social Sciences, 5(1). https://doi.org/10.53790/ajmss.v5i1.91
Kingsley, I., & Tonuchi, J. E. (2021). Contribution to the empirics of electricity blackouts and productivity in Nigeria. Energy Economics Letters, 8(1), 60-69.
Marshall, W. C., & Rochon, L.-P. (2019). Public banking and post-keynesian economic theory. International Journal of Political Economy, 48(1), 60–75. https://doi.org/10.1080/08911916.2018.1550947
Murakami, H. (2022). The unique limit cycle in post Keynesian theory. Chaos, Solitons & Fractals, 154, 111597. https://doi.org/10.1016/j.chaos.2021.111597
Odhiambo, N. (2020). Oil price and economic growth of oil-importing countries: A review of international literature. Appl Econ Int Dev, 20, 1-23.
Oladunni, S. (2019). External shocks and optimal monetary policy in oil exporting small open economies [PhD]. University of Bath.
Omitogun, O., Longe, A. E., & Muhammad, S. (2018). The impact of oil price and revenue variations on economic growth in Nigeria. OPEC Energy Review, 42(4), 387-402.
Omotosho, B. S. (2020). Oil price shocks, fuel subsidies and macroeconomic (in) stability in Nigeria. Fuel Subsidies and Macroeconomic (In) stability in Nigeria (February 20, 2020).
Oyeyemi, A. M. (2013). The growth implications of oil price shock in Nigeria. Journal of Emerging Trends in Economics and Management Sciences, 4(3), 343-349.
Prates, D. (2020). Beyond Modern Money Theory: a Post-Keynesian approach to the currency hierarchy, monetary sovereignty, and policy space. Review of Keynesian Economics, 8(4), 494–511. https://doi.org/10.4337/roke.2020.04.03
Raifu, I.A. (2021), The institutional role in oil revenue-economic growth nexus in Nigeria. OPEC Energy Rev, 45: 52-84. https://doi.org/10.1111/opec.12197
Sergio, C., & Riccardo, P. (2022). The relation between Keynesian monetary theory and demand-led growth: a Sraffian exploration. Review of Keynesian Economics, 10(3). https://doi.org/10.4337/roke.2022.03.01