OIL REVENUE AND ECONOMIC GROWTH IN NIGERIA: AN EMPIRICAL ANALYSIS

Abstract

 This research work was projected to investigate the impact of oil revenue on economic growth of Nigeria between 1981 and 2019.  Ex – post facto research design was carried out; annual time series data for analysis were sourced from Central Bank of Nigeria Statistical Bulletin of 2019. Real Gross Domestic Product (RGDP) was used as the dependent variable proxy for economic growth. Oil Revenue, Foreign Direct Investment (FDI) and Exchange Rate (EXR) all represent explanatory variables.  The study employed Auto Regressive Distributed Lag (OLS) Model which was used to analyzed and estimate the coefficients of the parameters. Other diagnostic tests employed by this study include;   unit root test, descriptive statistics, correlation coefficient matrix, Cointegration test and test of Normality, and they confirmed the validity and reliability of the model used; the inferential results showed that oil revenue impacted positively and significantly on the economic growth of Nigeria within the period under review. The paper recommended strongly that Government should diversify the economy from oil dependent economy to agriculture and manufacturing driven economy, this will provide alternative source of revenue to the government for adequate funding of annual national budget. Adherence to the recommendations will reduce the over reliance on oil revenue and thereby stabilizing the economy