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The impact of oil price and revenue variations on economic growth in Nigeria
Author(s) -
Omitogun Olawunmi,
Longe Adedayo Emmanuel,
Muhammad Shehu
Publication year - 2018
Publication title -
opec energy review
Language(s) - English
Resource type - Journals
eISSN - 1753-0237
pISSN - 1753-0229
DOI - 10.1111/opec.12139
Subject(s) - revenue , economics , oil price , exchange rate , monetary economics , crude oil , index (typography) , marginal revenue , agricultural economics , finance , world wide web , computer science , petroleum engineering , engineering
The study investigates the relationship between oil price, revenue variation and economic growth in Nigeria. The study makes use of a secondary data spanning 1981 and 2016. The Auto‐regressive Distributed Lag was used to analyse the long‐run and short‐run relationship among the variables. The short‐run result shows that oil price and oil revenue positively significantly relates with economic growth, while consumer price index and exchange rate negatively relates with economic growth. In the long‐run, oil price, consumer price index and exchange rate positively relates with economic growth, while oil revenue negatively relates with economic growth. This implies that oil revenue has not been channelled in the direction of enhancing growth in Nigeria, while oil price has been in favour reason been that it determines a larger percentage of the country's revenue. From the findings, the study concludes that variations in oil price and oil revenue are strong determinant factors of economic growth in Nigeria. A major recommendation is that, oil revenue should be restructured towards the strategic sectors of the economy to aid the growth in Nigeria.