An Empirical Investigation of the Effect of the Covid-19 Index on Foreign Direct Investment in Nigeria

This study is an empirical investigation of the effect of the covid-19 index on foreign direct investment in Nigeria. The specific objectives of the study are to access the effect of covid-19 shocks index on foreign direct investment (FDI) in Nigeria, ascertain the effect of covid-19 vaccine index on foreign direct investment (FDI) in Nigeria and determine the effect of covid-19 uncertainty index on foreign direct investment (FDI) in Nigeria. The outbreak of coronavirus also known as COVID-19 towards the end of year 2019 disrupted the Nigerian economy. The Shocks of the Covid-19 pandemic have been widespread and have disproportionately affected vulnerable sections of the population, including children and their families. According to the World Bank, the shocks of the COVID-19 (coronavirus) pandemic and its economic and social influences on every Nigerian have created an urgent need for a timely study to help monitor and mitigate Covid-19 shocks for Nigeria's well-being, especially for multinational companies home and abroad. In this context, this study utilizes the new measures of Covid-19 indexes as proposed by Narayan et al. (2021) which include the Covid Index (CI), Vaccine Index (VI) and Covid-19 Uncertainty Index (UI) to measure Covid-19 shocks, while the foreign direct investment (FDI) was measured with net inflows (BoP, current US$) with exchange rate (EXR) and inflation rate (INFR) as control variables. The findings emanating from the research show that Covid-19 shocks have a negative and significant influence on foreign direct investment in Nigeria. The study therefore recommends that the federal government should build a post COVID-19 diversified economy that will expand the country’s access to foreign market so as to have variety of commodities to trade in the foreign market