Oil Revenue and Economic Growth of Nigeria: 1990 – 2019

Abstract

The oil and gas business in Nigeria has brought unparalleled fluctuations to the Nigerian economy, mostly in the past five decades after it substituted agriculture as the basis of the Nigerian economy. This study investigated the relationship between oil revenue and economic growth in Nigeria. It spanned through the period 1990 through 2019. The specific objectives are to investigate the relationship between crude oil/gas export, petroleum profit tax/royalty, domestic crude oil sales, oil licensing fees on real gross domestic product and real gross national product in Nigeria. And also, ascertain whether the exchange rate moderates the relationship between oil revenue and economic growth in Nigeria. The study employed an ex post facto research design and the secondary data used for the investigation were sourced from the Central Bank of Nigeria (CBN) statistical bulletin, Federal Inland Revenue Service Fact Book and the World Bank Development Website. Descriptive Statistics, Pearson Moment Correlation Coefficient and Ordinary Least Square Multiple Regression Statistical tools were used in the study. The results revealed that Crude oil/gas export has a significant and negative relationship with the real gross domestic product in Nigeria; Petroleum profit tax/royalty has a significant and positive relationship with real gross domestic in Nigeria; Domestic crude oil sales have an insignificant and negative relationship with real gross domestic product in Nigeria; Oil licensing fees have an insignificant and negative relationship with real gross domestic product in Nigeria; The study concluded that there is a significant relationship between oil revenue and economic growth in Nigeria. The study recommends that the government should effectively and efficiently utilize the oil fund in strategic development projects so as to reduce the rate of poverty and facilitate economic growth.