ABSTRACT
Crude oil has been a major source of revenue, energy, and foreign exchange for the Nigerian economy over the past three decades. In light of this, this project work investigates the impact of oil exports on economic growth in Nigeria using annual time series data for the period 1985-2019. The main objective of this research work is to evaluate the impact of oil exports on economic growth and the nature of relationship that exists between oil exports and economic growth.
An endogenous growth model is employed for the study with emphases on how oil export, non-oil export, foreign direct investment and real exchange rate affect economic growth in Nigeria. The variables considered are real GDP, a proxy for economic growth and the dependent variable. Oil export value, non-oil export value, foreign direct investment and exchange rate as independent variables. Augmented Dickey-fuller (ADF) test was used to test for the stationarity of the variables and they were found to be stationary at first difference. Then Johansen co-integration technique was used to establish if the stationary variables are co-integrated in the long run. Further, ECM is employed to correct any form of disequilibrium in the short run. The result of stationarity and diagnostic tests reveals that the model is well specified and could be used for policy analysis. The analysis was based on data extracted from Central Bank of Nigeria (CBN) statistical bulletin and World Development Indicators (WDI).
The result of the analysis shows that all the variables except oil export and real exchange rate were statistically significant at 5% level. The results therefore reveal that there is, overall, a negative relationship between economic growth and oil export. The study based on its finding suggests that the government should adopt policies capable of diversifying the economy to other non-oil sectors and providing security against the smuggling of crude oil and general unrest in the Niger-delta regions. The government should also provide an enabling environment for foreign investors and domestic producers as well as ensure a stable exchange rate.
