The procedure for developing a text-based index usually begins with the identification of keywords that relate to economic policy. Note that there are several EPU indices already published (see https://www.policyuncertainty.com/) albeit with a focus on developed and emerging economies without any representation from Africa. One common feature of these indices is that they adopt similar keywords whose choice is pioneered by Baker et al. (2016) to facilitate cross-country comparison of datasets. In light of this, we adopt similar keywords such as uncertainty, uncertain, uncertainties, economic, economy, senate, deficit, the central bank of Nigeria, legislation, regulation, house of representatives, house of reps, national assembly, and CBN. Note some keywords that reflect the peculiarities of Nigeria such as the Central Bank of Nigeria, House of Representatives, house of reps, national assembly, and CBN are included to produce a more realistic index for Nigeria.

The second step involves downloading all available news articles and then extracting relevant news articles containing these keywords from eight notable newspapers in Nigeria. As previously noted the newspapers are the Punch, ThisDay, The Guardian, Business Day, Daily Trust, Nigerian Tribune, PM news, and Leadership newspapers. It is tedious to extract these news articles as virtually all of them do not have APIs that provide seamless access to their news content. This may be the reason why Nigeria has not been included in the computation of global uncertainties. Thus, we had to adopt alternative tools to extract the keywords. These alternative tools include Web Scraping, Sitemaps Access, and RSS Feeds, among others. At the end of the procedure, we obtain a daily word count for each of the keywords over the period of 1/1/2010 – 11/30/2022.

In the final setup of the index, we consider the following:

1. We sum the daily word counts for all the selected keywords to obtain time series points for the EPU data.
2. We adjust the summed word counts based on equation (1) of the paper. This is to account for the day-of-the-week effect in the EPU data
3. The EPU index is computed using the formula expressed in equation (2) of the paper.

Main reference paper: 

Salisu, Afees and Salisu, Sulaiman and Salisu, Subair, A News-Based Economic Policy Uncertainty Index for Nigeria (April 16, 2023). Available at SSRN: https://ssrn.com/abstract=4420077

Additional references: 

Ahir, H., Bloom, N., & Furceri, D. (2022). The world uncertainty index (No. w29763). National Bureau of economic research.

Baker, S. R., Bloom, N., & Davis, S. J. (2016). Measuring economic policy uncertainty. The Quarterly Journal of Economics, 131(4), 1593-1636.

Baker, S. R., Bloom, N., Davis, S. J., & Terry, S. J. (2020). Covid-induced economic uncertainty (No. w26983). National Bureau of Economic Research.

Narayan, P. K., Iyke, B. N., & Sharma, S. S. (2021). New Measures of the COVID-19 Pandemic: A New Time-Series Dataset. Asian Economics Letters, 2(2). https://doi.org/10.46557/001c.23491