ABSTRACT

The study examined the petroleum sector and it's economic impact in Nigeria. The study used annual data of Nigeria from 1981 to 2019 to examine the impact of petroleum sector on Nigerian economy. The study employed the Augmented Dickey-Fuller (ADF) test for Unit Root to assess the stationarity of the variables used and after which the Johansen Co-integration technique is used to check for the possibility of long run relationship among the variables under study. The Error Correction Model (ECM) was utilized for estimation. It was observed from the findings that a positive and statistically significant relationship exists between Oil rents and economic growth in Nigeria. The contributions of Oil rents to the economic prosperity of Nigeria has been significantly observed. A positive and statistically significant relationship exists between the Non-oil sector and the Oil-sector in Nigeria. Both sectors exhibits a significant and positive correspondence in Nigeria hence facilitating growth. The study recommended that proper and effectively outlined policy frameworks should be put in place by the government through the relevant agencies to ensure that Oil rents is effectively managed and channeled towards contributing significantly to economic growth in Nigeria.