Impact of Coronavirus Pandemic on Financial Market Stability in Africa

Kalu O. Emenike


University of Eswatini, Department of Accounting and Finance, Private Bag No 4, Kwaluseni M201, Kingdom of Eswatini (Eswatini)
https://orcid.org/0000-0002-3599-0281

Abstract

The outbreak of the coronavirus in December 2019, with its accompanying declaration as a pandemic by the World Health Organisation in March 2020, resulted in lockdown of the global financial markets. This paper uses data from pre-coronavirus, coronavirus endemic and coronavirus pandemic periods to evaluate the impact of coronavirus pandemic on stability of Africa stock markets, sovereign bond markets and U.S. dollar exchange rates in Kenya, Morocco, Nigeria and South Africa as well as Africa Sharia equity and Sukuk indices. Findings from study suggest that Africa financial markets became very unstable during the coronavirus pandemic than during the endemic and pre-coronavirus periods. Results from bivariate regression model show evidence of negative impact of coronavirus pandemic on financial market returns. The results further show that Africa financial markets return volatility increases as the number of coronavirus cases increases. Overall, the findings suggest that coronavirus has negative impact on financial markets’ returns and exacerbated financial markets instability thus retarding sustainable economic development in the continent.

JEL Classification Numbers:  G10, I12, O55


Keywords:

Coronavirus, COVID-19, stock market, sovereign bond market, exchange rates, volatility, skewness, market stability, Africa

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Published
2021-07-01

Cited by

Emenike, K. O. (2021). Impact of Coronavirus Pandemic on Financial Market Stability in Africa. Problemy Ekorozwoju, 16(2), 18–25. https://doi.org/10.35784/pe.2021.2.02

Authors

Kalu O. Emenike 

University of Eswatini, Department of Accounting and Finance, Private Bag No 4, Kwaluseni M201, Kingdom of Eswatini Eswatini
https://orcid.org/0000-0002-3599-0281

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