Macroeconomic uncertainty and sectoral output in Nigeria
File(s)economies-3242612.docx (313.59 KB)
Accepted version
Author(s)
Oyadeyi, Olajide
Type
Journal Article
Abstract
The paper examined the impact of macroeconomic uncertainty on the ten largest subsectors of the Nigerian economy using quarterly data from Q1 1981 to Q4 2023. The rationale behind selecting the subsectors is that these sectors constitute about 89 percent of the entire productive activities in the economy. To achieve the objectives, the paper created an index for macroeconomic uncer-tainty using exchange rate uncertainty, interest rate uncertainty, inflation uncertainty and GDP uncertainty to create this index. Furthermore, the paper explored the impacts of macroeconomic uncertainty and these individual economic uncertainty indexes on sector output. The study em-ployed the novel dynamic ARDL technique to estimate the results and used the CCR and FMOLS techniques as robustness on the main findings. The findings demonstrated that during periods of recession, macroeconomic uncertainty tends to heighten or reach its peak in Nigeria. Further-more, the paper showed that the sectors react homogenously to macroeconomic uncertainty. In addition, the impulse response results from the novel dynamic ARDL estimation show that macroeconomic uncertainty can predict robust negative movements in sector output for Nigeria. Indeed, these findings are insightful as they show the importance of macroeconomic uncertainties as key drivers of sector output in Nigeria. The paper argues that the policy authorities should improve their efforts to reduce macroeconomic uncertainty and foster a stable real sector/sectoral output to enhance the macroeconomic environment for Nigeria to aim for higher levels of growth.
Date Acceptance
2024-11-05
Citation
Economies
ISSN
2227-7099
Publisher
MDPI AG
Journal / Book Title
Economies
Copyright Statement
Subject to copyright. This paper is embargoed until publication. Once published the Version of Record (VoR) will be available on immediate open access.
License URL
Publication Status
Accepted
Rights Embargo Date
10000-01-01