International Journal of Economics and Financial Research Economic Growth of Nigeria: Does Oil Revenue Matters? (original) (raw)

The backbone of every nation is usually its economy. Nigeria, like other development countries of the world is paying more attention on how to accelerate the rate of development through the various sections of the economy. Oil is a natural resource, it is a very versatile and flexible non-productive, depleting, natural resource which is a fundamental input to modern economic activities providing about 50% of the total energy demanded in the world excluding the former centrally planned economy. In most cases, 90 percent or above of Oil exploiting countries of the world depend heavily on oil revenue for foreign exchange earnings and for the government budget. Petroleum or crude oil is known as hydrocarbon because it consists of a mixture of many substances but mainly carbon and hydrogen. It also contains a very small amount of sulphur, nitrogen, and oxygen which are nonhydrocarbon element. Petroleum industry controls the exploration and production of crude oil as well as its refining, marketing and servicing. Explicit policy objectives with respect to petroleum and mining are as follows: Active government participation in mining operations, diversification of mineral products, the organization and regulation of the development of mineral resource so as to optimize their contribution to the overall national development effort, the conservation of the countries mineral resources, research into efficient extraction methods and wider application and use of mineral manpower development of internal self sufficiency in the supply and effective distribution of petrol industry products, gas commercialization and the control of the problems (environmental) of oil production (Obadan, 1987). The present significant position of oil in the natural economy was not assumed until the early 1970's. It is not a novel revelation that it has since become the mainstay of contemporary Nigerian economy. Petroleum products such as petrol, diesel, fuel, oil, lubricant or petrochemical makes Nigeria's economy wheel go round. Petroleum has transformed many nations which were once poor into rich nation, it transformed bankrupt nations into creditors and desert into watersheds. Specifically, using Nigeria as an example, there is no gain saying that the oil sector has undergone tremendous transformation over the years. (Anyanwa, 1997). No other resources in Nigeria has played such a towering role over the national economy as crude oil. This industry has emerged from being merely the "supportive" economic sector it was in the 1960's into the predominant source of foreign exchange and