Impact of economic recession on the Nigerian economy

Patrick Akani Odey; Oluwaseun Adeniran Sunday; Hamisu Ali

doi:10.65453/ijar.v10i1.1278

Authors

Patrick Akani Odey
Oluwaseun Adeniran Sunday
Hamisu Ali

DOI:

https://doi.org/10.65453/ijar.v10i1.1278

Keywords:

Economic Recession, Output Level, Inflation, Unemployment, Exchange Rate

Abstract

This study examines the impact of economic recession on the Nigerian economy from 1996 to 2023. It aims to determine the direction of causality between economic recession and output levels in Nigeria. Data were obtained from the World Bank Database and the Central Bank of Nigeria Statistical Bulletin. Nigeria’s output level was measured using real gross domestic product (GDP), while economic recession was measured using inflation, unemployment, and exchange rates. The Toda-Yamamoto non-Granger causality test was employed to determine the causal relationship between economic recession and output levels. The findings reveal no causal relationship between output levels and inflation in Nigeria. However, a unidirectional causality was found running from unemployment to output levels. Additionally, a bidirectional causality exists between exchange rates and output levels. Based on these findings, the study recommends that employment should be prioritized as a key policy tool in addressing inflation and improving output levels in Nigeria.

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