Measuring Economic Resilience Beyond GDP: A Composite Index for Evaluating Nigeria's Recovery from Global Commodity Shocks

Abstract

Gross Domestic Product (GDP) remains the dominant metric for assessing national economic performance, yet its narrow focus on output growth obscures a country's underlying capacity to absorb, adapt to, and recover from external shocks. This limitation is particularly consequential for commodity-dependent economies such as Nigeria, where GDP growth has repeatedly masked deep structural vulnerabilities exposed during the 2014–2016 oil price collapse and the 2020 COVID-19-induced commodity crash (Hallegatte, 2014; Martin & Sunley, 2015). This paper develops and applies a Nigeria Economic Resilience Index (NERI), a composite measure spanning four dimensions: macroeconomic stability, fiscal buffer capacity, structural diversification, and social welfare resilience. Using principal component analysis to derive indicator weights, the index is constructed from secondary macroeconomic and social data spanning 2010 to 2023. Results show that Nigeria's resilience score declined sharply during both major commodity shock episodes, with the fiscal buffer and structural diversification dimensions proving the most volatile and slowest to recover. Notably, periods of positive GDP growth did not always coincide with rising resilience scores, revealing hidden vulnerability that conventional GDP-based assessments fail to capture. The paper argues that composite resilience indices offer a more comprehensive diagnostic tool for policymakers seeking to build shock-resistant, diversified economies, and concludes with recommendations for institutionalising resilience monitoring in Nigeria's national statistical and fiscal planning systems.