DO GLOBAL UNCERTAINTY AND RISK INFLUENCE ECONOMIC GROWTH IN NIGERIA? EVIDENCE FROM QUANTILE REGRESSION ANALYSIS

Abstract

Uncertainties and risks have continued to play a significant role in shaping economic decisions and outcomes in many countries. Like many other countries, Nigeria is exposed to global economic policy uncertainty. Nigeria is vulnerable to geopolitical risk because of its strategic location in both sub-Saharan Africa and the West African subregion. However, the impact of economic policy uncertainty and geopolitical risk on Nigeria's economic growth has not received much research. Considering these circumstances, the study utilizes quantile regression analysis to explore the impact of global economic policy uncertainty and geopolitical risk on Nigeria's economic growth, utilizing monthly data for all variables from January 1997 to December 2023. The result indicates that economic growth is negatively related to global economic policy uncertainty at the lower quantile; however, the relationship turned positive at the middle and upper quantile. On the other hand, geopolitical risk has a negative relationship with economic growth across all the quantiles. The study recommends that policymakers make robust policies that will promote the diversification of the Nigerian economy to withstand any form of influence emanating from elsewhere. Similarly, human capital development should continue to be promoted with a view of having quality manpower capable of initiating local solutions to Nigeria’s problems, among other recommendations.