Simulating the Impact of the Economic Sustainability Plan on the Performance of the Nigerian Economy in the Post COVID-19 Era

Abstract

This study examines the impact of Economic Sustainability Plan (ESP) on the performance of the Nigerian economy as a national economic resilient policy in the post COVID-19 era within the framework of a macro-econometric model. The study is hinged on the Keynesian general theory of employment, income and interest. Annual time series data spanning from 1970 to 2019 for within sample forecast, and a six-year out-of-sample forecast spanning from 2020 to 2025 were used. The policy scenario of 21.3 percent increase in government expenditure under the ESP as a stimulus package was simulated and the findings showed that increase in government expenditure under the ESP in critical areas would bring about significant impact on the macroeconomic performance of the Nigerian economy, especially on employment, inflation, economic growth and balance of payment in the post COVID-19 era. Emergent from these findings, the study recommended among others that the government should mobilize resources to finance the ESP in order to stimulate the economy in the post COVID-19 era by ensuring prudential fiscal management of resources; and the Central Bank of Nigeria (CBN) should ensure that financial institutions saddled with the responsibility of disbursement of intervention funds reduce interest rate from 9 percent to 5 percent as reflected in the ESP.