Crude Oil Dependence, Deindustrialization and Economic Growth in Nigeria (original) (raw)
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Oil Consumption and Economic Growth in Nigeria: A Multivariate Cointegration Analysis
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American Journal of Economics, 2017
The paper examines the impact of both oil and non-oil foreign direct investment (FDI) on economic growth in Nigeria for the period 1980. The paper employed ARDL Approach to Cointegration and conditional EC Model in order to ascertain the long run and short-run relationships between the two categories of FDI (oil and non-oil), investment, export and economic growth. Bound cointegration test established that there is long run equilibrium relationship among the variables. Evidence from short run and long run elasticities shows that while non-oil FDI has positive effect on the growth of GDP, oil FDI exerts a negative effect on the economy and this may be due to the high profit repatriation and low level of domestic employment in the subsector. The result further shows that domestic investment has significant positive effect on economic growth, the coefficient of export is also positive although insignificant. In this study, we show that economic growth in Nigeria is largely propel by in...
Science Archive, 2022
The overdependence on crude oil has produced susceptivity to every part of the Nigerian Gross Domestic Growth (GDP) and there was the need to examine the effect of crude oil on the economy of Nigeria. This study, therefore, investigates the long-run effect between oil revenue, oil price volatility, and economic growth in Nigeria. The data on oil revenue, non-oil revenue, oil price volatility, and per-capita income from the year 2006to 2020 extracted from the Central Bank of Nigeria (CBN) Statistical Bulletin was applied in this research work. The research applied Descriptive Statistics, Augmented Dickey-Fuller Unit Root test, Johansen cointegration, and Autoregressive Distributed Lag (ARDL) co-integration statistical method to examine the long-run effects of crude oil production on Nigeria's economy. It was discovered from our result that; oil revenue plays a remarkable role in Nigeria's economy by its advancement of the country's GDP. Furthermore, Nigeria has regulated oil revenue to accomplish economic growth in numerous ways. The study recommended that the Nigerian Government should diversify its export supply through downstream production and encouragement of more private sector participation.
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Many economists have raised cogent concerns regarding the economic stability of Nigeria, given the volatility and in recent times, the decline in oil prices. Since the discovery of crude oil in commercial quantity in Nigeria in 1956 and the attendant oil boom in the 1970s, oil has been the thought and the talk of the country chiefly because of its associated quick and huge returns. The nation by way of dependence on this black gold has experienced rapid economic growth though in an inconsistent manner: this can be attributed to the volatility in the price of the crude oil upon which the country leans. This paper shows how volatility in oil prices engenders inconsistency in economic growth vis-à-vis oil production and oil exports. Secondary data from 1993 to 2015 and descriptive tools were used to assess this and it was found that there exists a positive correlation between oil dependency and inconsistency in economic growth in Nigeria. Growth was attained as a result of high world oil prices; however, due to volatility in oil prices and failure of the country to industrialise and diversify the economy from its monocultural nature, such growth tends to be volatile. It was, therefore, recommended that a forceful and pragmatic diversification, chiefly towards the manufacturing sector, is the key to an increased and a sustainable economic growth.
Crude Oil Price Dwindling and the Nigerian Economy: A Resource-Dependence Approach
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This study examined the effect of Crude Oil Fluctuation and the Nigerian economy: A resource-dependence approach covering a study period of 35 years (1984-2018). Variables used include Fluctuation in Oil Price per Barrel (FOBP), Diesel Pump Price Fluctuations (PPPF), Petrol Pump Price Fluctuations (DPPF), Kerosene Pump Price Fluctuation (KPPF), and Real GDP. The data were gotten from the CBN Statistical Bulletin, World Bank Report, and Oil Producing Exporting Countries Annual Report while it was analyzed using Auto-Regressive Distributed Lag Model. Various diagnostic tests proved that the model is fit for the study. Accordingly, the trend analysis appears to cast doubts on whether crude oil fluctuation made significant contributions to the Nigerian economy. However, the Pearson correlation coefficient substantially attests to a strong linear relationship between the regressed and the regressors. Particularly, the individual results restated that in the short run only Fluctuation in ...
This study develops an econometric model for economic growth determinants of Nigeria, as a representative of an oil-dependent country. The model is estimated using time-series data, spanning the period 1980 to 2002, using Engle-Granger two-step co integration technique, capturing both the long-run and short-run dynamic properties of Nigeria’s economic growth. By developing parsimonious and empirically significant model, it is found that investment (both in human capital and physical capital), exchange rate, exports of goods and services and oil production have long run effects on economic growth, while gross domestic savings, current account balance and Nigerian price of oil have short run effects. Econometric results indicate that contrary to general believe that natural resource abundance slows economic growth, oil earnings and production is a recipe for economic growth and is highly significant in determining Nigeria’s economic growth.