Assessing the Macroeconomic Impact of COVID-19 Pandemic on the Nigerian Economy through the Lens of SIR-Macro Model

This study focused on assessing the impact of COVID-19 pandemic on Nigerian economy through the lens of SIR-macro model. We implemented the SIR-macro model developed by Eichenbaum et al. (2021) to study the interaction between agents’ economic decisions and COVID-19 epidemic. We calibrated the parameters of the models based on the characteristics of Nigeria’s economic structure and analyzed the implications of containment policies on the severity of economic recession as well as the dynamics of the epidemics. We found that government containment policies were effective in reducing the severity of the epidemic in terms of the spread of the disease and number of deaths. The containment policies on the other hand exacerbated the severity of the economic recession. We concluded that the predictions of the model are qualitatively sufficient in explaining the macroeconomic outcomes in Nigeria during this period. We suggest that government should consider socio-demographic characteristics of the country in the selection of policies in an epidemic condition. The government should strengthen the health care system with adequate infrastructure to prevent large case fatalities. JEL Code: C51, C63,E71,I12, I18