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Exploring daily panel dataset spanning January 5, 2015 to January 28, 2021, we examine the reaction prowess of African stock markets to the different phases of the COVID-19 outbreak namely, pre–COVID period; epidemic period; and pandemic period. We show that irrespective of the different phases of the COVID-19 outbreak, South Africa ranked first as the country with the highest incidence of COVID-19 in Africa both in terms of number of confirmed cases and deaths. However, while Morocco and Tunisia ranked second and third in terms of the number of COVID-19 cases, it was Egypt that ranked second in terms of the number COVID-19 deaths. Employing a PMG –based panel–ARDL model, we offer evidence –based insights on the dynamic of stock markets during COVID-19. We show that number of confirmed cases rather than number deaths tend to be responsible for the declining stock returns in Africa during the pandemic phase of the COVID-19 outbreak. Whereas, the evidence of declining stock returns during the epidemic phase of the COVID-19 appears to be mainly attributable to changes in the international oil prices and exchange rates, respectively. That said the effectiveness or otherwise of efforts at minimizing negative reaction of stock returns to COVID-19 cannot be in isolation of whether the emphasis is on the number of confirmed cases and/or the number of confirmed deaths.

This study employs the connectedness measure of Diebold and Yilmaz (2012, 2014) to examine the intensity of connectedness among the Nigerian financial markets for the period January 2000 to December 2018. The study used all shares index, Treasury bill rate and Naira/USD official exchange rate to measure stock market, money market and exchange rate market, respectively. The study found connectedness among the Nigerian financial markets to be highly time-varying and appear to be higher during the period of high depreciation of the naira which coincides with the period of falling oil prices and domestic economic meltdown of 2014 and 2016, respectively. This shows that, relative to external shocks, connectedness among financial markets is likely to get amplified during the time of domestic turbulence. The paper, therefore recommends that policymakers should look inward whenever policy discuss revolves around the increasing integration of financial markets to save the economy from aggravation of contagion.

Motivated by the distinctive paradoxical nature of the Nigerian economy as the only OPEC oil-exporting economy that yet depends heavily on the importation of gasoline, we are compelled to re-examine the accuracy of the oil-based augmented Philips curve model in the predictability of inflation. Using quarterly data from 1970 to 2020, we investigate whether extending the oil price-based augmented Phillips curve to include exchange rate improves the accuracy of inflation forecast in Nigeria. We rely on the outcomes of our preliminary analysis to account for the presence of endogeneity, persistence and conditional heteroscedasticity in the predictability of inflation following the Westerlund and Narayan (2015) procedure. We find the extended variant of the oil price-based Phillips curve model that includes the exchange rate pass-through as most accurate for improving inflation forecasts in Nigeria. Given the robustness of our results from several models, we conclude that the exchange rate channel through which shocks to the oil price transmit into the economy is essential for enhancing the accuracy of inflation forecasts.asymmetry, exchange rate, inflation forecasts, Nigeria, oil price, Phillips curve | INTRODUCTIONLow and stable inflation remains a key objective of monetary policy in most countries across the globe. But achieving this objective can be quite challenging in the absence of a reliable inflation forecasting framework. Since monetary policy and its ultimate success in achieving price stability depends, among others, on the likely path of inflation, the quest for more accurate and reliable inflation forecasts cannot

This paper examines the effectiveness of the interest and exchange rates channels of monetary policy transmission mechanism. The paper employed several statistical cum econometric methodology in a baseline structural vector autoregressive (SVAR) model to evaluate the influence of policy shocks on selected endogenous variables; gross domestic product (GDP), consumer price index (CPI), money supply (MS), treasury bill rate (TBR) and nominal exchange rate (NER) for Nigerian spanning 1981Q1 to 2020Q1. The contemporaneous coefficients in the structural model reveals that key monetary aggregates reacts positively to unexpected changes in the monetary policy instruments. Furthermore, the variance decomposition results indicate that shocks of the selected variables were found to be important for interest rate growth in the short and longer horizons. The exchange rate channel however appears to have a stronger impact on prices. These results mean that depreciation of the nominal exchange rate could be an external deflationary element, particularly for Nigeria.