Yekeen O. Abdul-Maliq
Banking and Finance Department
University of Abuja.
Tel: +234 803 777 0262
Paper presented at the 11 th AFRA Annual International Conference: Ghana 2021
This paper assesses the one-year (contemporaneous), impact of the COVID-19 pandemic on
the Nigerian banking sector as well as on the economy at large. The study compares the
averages of monthly data (M1), broad money (M2), currency outside the bank (M3), stimulus
financing (special intervention) banking system credit to the government and the private sector
as well as nominal GDP, for four years pre COVID-19. (2016 - 2019), with the averages of
one-year monthly average of the COVID-19 year. Data analyses reveal that money supply (M1,
M2) and stimulus intervention were higher in the COVID year than their 4-year average pre-
COVID. Analyses also show that currency outside bank was 26 percent higher while demand
deposit was 50 percent lower in the COVID year than their 4-year pre-COVID averages.
Furthermore, Banking system credit to government and the private sector were 96 and 28
percent respectively, higher in the COVID year than their 4-year pre-COVID year averages.
Also, the E-view results of the impact of the above variables on GDP reveal that 2020 GDP
value is marginally higher (0.88 percent) than the four-year pre-COVID average. Also, M1,
M2 and Government consumption were significant in explaining the 78 percent variation in
GDP in the five years combined regression analysis. The test of structural break was
indeterminate. The study concludes that the impact of COVID-19 pandemic on the Nigerian
banking system and economic was not very severe as feared. This however does not imply that
Nigeria should become complacent with COVID-19 protocols or relent on her efforts at
protecting the nation and the economy against it, particularly in the face of the emergence of
Delta variant of COVID-19.