Preview

Petroleum and the Nigeria Economy

Good Essays
Open Document
Open Document
2940 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Petroleum and the Nigeria Economy
Global Business and Economics Research Journal ISSN: 2302-4593 Vol. 2 (5): 102 - 115

The impact of petroleum on economic growth in Nigeria
Michael Baghebo
Niger Delta University, Bayelsa State, Nigeria baghebomichael@yahoo.com

Timothy Okule Atima
Niger Delta University, Bayelsa State, Nigeria

Abstract The study examines the impact of petroleum on economic growth of the Nigerian economy. Data covering the period 1980-2011 was collected from the Central Bank of Nigeria Statistical Bulletin, and transparency international Agency annual publications and analyzed using econometric approach. The stationary status of the time series data was examined using Augmented Dickey Fuller test. The regressand is Real Gross Domestic Product (RGDP), The regressors are Foreign direct investment (FDI), Oil revenue (OIL), Corruption index (CI), External debt (EXDEBT). The series attained stationary after differencing. The Johansen cointegration test was conducted to ascertain the long run equilibrium condition of the variables in the model. The variables were cointegrated because four cointegrating equations were found. The Parsimonous model was established to account for the short run dynamic adjustments required for stable long run equilibrium. It was discovered that the variables: oil revenue and corruption index impacts negatively on Real GDP, while FDI and EXDEBT have positive impact on the growth of the economy. This means that the resource curse theory is proven to be true in Nigeria. The study concludes that, if the petroleum industry bill is passed and implemented to the letters, there exists hope for the Nigerian nation. Keywords: petroleum, economic growth, Nigeria

Citation: Baghebo, M. and Atima, T. O. (2013). The impact of petroleum on economic growth in Nigeria. Global Business and Economics Research Journal, 2(5): 102-115.

© Global Business and Economics Research Journal. Available online at http://www.globejournal.org

Page

102

Baghebo and
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Powerful Essays

    Shell Oil in Nigeria
    • 1184 Words
    • 4 Pages

    Shell Oil in Nigeria

    1. What are some of the factors explaining why corruption and bribery are so high in Nigeria?…

    • 1184 Words
    • 4 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Racial Profiling
    • 643 Words
    • 2 Pages

    Racial Profiling

    Unlike the education system, the economy of Nigeria is evolving. Even though the economy is doing well, the money is not being used to better poor parts of the country. Nigeria is the 8th largest oil exporter in the world. The Gross Domestic Product in Nigeria is 522.6 billion dollars and it continues to rise. Even though the economy is doing well 60 percent of Nigeria’s population lives in extreme poverty. There are also chronic power shortages, which increase cost of doing business in Nigeria up to 40 percent.…

    • 643 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Nigeria Economic Bloc
    • 2714 Words
    • 11 Pages

    Nigeria Economic Bloc

    Introduction: Nigeria is a country located in West Africa; it has a population of about 160,027,000 (World Economic Fact Book 2010). Its main produce is oil and petroleum; the country is also a key producer of rice, cocoa and palm-oil in West Africa. (See Appendix 1).Nigeria belongs to a number of economic blocs in Africa as there are quite a few, but this work shall focus on its ECOWAS membership.…

    • 2714 Words
    • 11 Pages
    Powerful Essays
    Read More
  • Best Essays

    Neo-Liberalism and the Resource Curse of Africa
    • 3264 Words
    • 14 Pages

    Neo-Liberalism and the Resource Curse of Africa

    Kass, Amanda. "Neoliberal Nigeria, The United States, and Oil: Linking Production and Consumption." Research dIstinction (2008): 4-5. https://kb.osu.edu/dspace/bitstream/handle/1811/32236/thesis.pdf?..…

    • 3264 Words
    • 14 Pages
    Best Essays
    Read More
  • Satisfactory Essays

    Nigeria Oil Crisis
    • 347 Words
    • 2 Pages

    Nigeria Oil Crisis

    This article displays a vivid picture for us about the conditions in Nigeria due to the oil reserves. Though Nigeria contained the potential to strive and become a wealthy oil nation, leaving the cocoon of poverty encompassing Africa- it became trapped in a lot of corrupt dealings. Today, the Niger Delta in Nigeria has caught the attention of world wide humanitarian and environmental activists. The article states how in the past, the corrupt government ruling Nigeria was funded by Western governments and large oil corporations. Together, the group have benefited from the fossil fuels that are in abundant supply in the delta region. However, the mines are not the only things that are in this area, there are people of the Niger Delta who have been harshly affected for decades due to this illegal mining.…

    • 347 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Nigerian Oil Conflict
    • 461 Words
    • 2 Pages

    Nigerian Oil Conflict

    a. Nigeria oil is a main part of the countries’ source of income and comprises 95% of their total exports. The nation is the 8th largest oil producer and the fifth largest supplier to America. Even though oil is so profitable, over half of Nigeria’s population lives below the poverty line.The extraction and demand for oil makes the government reckless in their pursuit for money, making Nigerian government corrupt. The population living below the poverty line live on two dollars day.…

    • 461 Words
    • 2 Pages
    Good Essays
    Read More
  • Powerful Essays

    Earnings Performance of Companies Using Debt Financing
    • 6860 Words
    • 24 Pages

    Earnings Performance of Companies Using Debt Financing

    Jimenez-Rodriguez, R. (2009). Oil Price Shocks and Real GDP Growth: Testing for Non-linearity. Energy Journal, 30(1), 1-23.…

    • 6860 Words
    • 24 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Economic Importance of Total Petroleum in Ghana
    • 2498 Words
    • 10 Pages

    Economic Importance of Total Petroleum in Ghana

    Using all the economic tools at your disposal, write a paper/report of not more than 2,500 words (preferably typed) on the company where you work by assessing its structure, its economic importance to the Ghanaian economy as well as its problems and suggested solutions.…

    • 2498 Words
    • 10 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Swot Analysis of Crude Oil Industry in India
    • 1154 Words
    • 5 Pages

    Swot Analysis of Crude Oil Industry in India

    Crude oil prices act like any other product cost with more variation taken place during shortage and excess supply. Studies have conducted to analyze the impact of rise in crude oil price to the economic growth in the OPEC (Organization of Petroleum Exporting Countries) countries. It has been observed that $10 in the crude oil price means decrease in the economic growth of the OPEC countries by 0.5%. This rise in prices account to have more influence on the economic condition of developing countries.…

    • 1154 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Implication of Oil and Gas Investment in Ghana
    • 15403 Words
    • 62 Pages

    Implication of Oil and Gas Investment in Ghana

    It is undeniable that oil, christened “black gold”, fuels the global economy. Oil converted into gas, petrol and diesel fuels our various modes of transportation that allows for the movement of goods and people around the globe. Due to the enormous financial resources that can accrue from this industry, the discovery of oil in any location, particularly developing countries, is greeted with great optimism. Such was the case in the golden jubilee year of Ghana’s independence when oil was discovered in commercial quantities in the Western Region of Ghana, the same region noted historically for rubber, forestry and minerals of various kinds. In the golden jubilee fields alone, it is estimated that by 2011, oil production per day would hit 120,000 barrels and the revenue from the oil and gas exploration is estimated to hit an accumulated value of US$20 billion between 2012 and 2030 (Gary 2009).…

    • 15403 Words
    • 62 Pages
    Powerful Essays
    Read More
  • Best Essays

    Bachelor Thesis Proposal
    • 1745 Words
    • 7 Pages

    Bachelor Thesis Proposal

    explained how firms tackle down the high risk and exposure in countries with low economic…

    • 1745 Words
    • 7 Pages
    Best Essays
    Read More
  • Good Essays

    Impact of Oil Price Shock and Its Effects on Stock Returns in Nigeria.
    • 12005 Words
    • 49 Pages

    Impact of Oil Price Shock and Its Effects on Stock Returns in Nigeria.

    Olomola , P.A and Adejumo A.V (2006) “ Oil Price Shocks and Macroconomic activities in Nigeria.…

    • 12005 Words
    • 49 Pages
    Good Essays
    Read More
  • Good Essays

    Money Market
    • 8055 Words
    • 37 Pages

    Money Market

    HE existence of money market facilitates trading in shortterm debt instruments to meet short term needs of large…

    • 8055 Words
    • 37 Pages
    Good Essays
    Read More
  • Powerful Essays

    oil & gas
    • 1546 Words
    • 7 Pages

    oil & gas

    The economy is affected by many factors that determine if it is strong or weak. These factors have to do with buyers consuming goods and services and at what rate they do this. Do the goods and services that are consumed by people created wealth, jobs and a better overall economy for a country. Throughout history some economies have evolved faster and stronger than others. Policies that the government places on industry, technology and the environment can all affect the prosperity of an economy. Of the factors that affect economic growth the industry of Oil and gas is one that holds a stronghold in the world's and America's economy today. When evaluating the economic growth factor of economy and specifically oil and gas on must consider the following questions: ¨ What relationship does the factor have with the whole economy? ¨ How does this factor affect economic growth ¨ Is the factor a cause or effect of economic growth? ¨ what would the economy be like if there were significant problems with this factor? ¨ What relation does a central bank have to this factor? I will answer each of these questions in respect to how economy is affected by oil and gas. The economy in the United States today is greatly affected by oil and gas. When there are large reserves and an increase of active drills in respect to oil, the economy seems to receive a boost. This is because prices for such things like gas and oil fall and people are able to consume more gas at a lower price. There is more supply and prices fall, therefore people save money on gas and can consume other items in the economy. People working in these industries have more job openings and more jobs filled, therefore creating a lower unemployment rate and a higher national per capita income. The need for substitutes are not there so, consumers will consume oil and gas at a growing rate. Since, people use oil and gas for so many different things like heating there homes,…

    • 1546 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Argumentative Essay on Women Are Better Leaders Than Men
    • 4639 Words
    • 19 Pages

    Argumentative Essay on Women Are Better Leaders Than Men

    This article overviews the growth and development of the Nigerian economy from inde pendence to present times. Specifically, the following periods are discussed: the pro-oil boom decade (1960-70); the period of the oil boom (1971 1977); the period of stabilisation and structural adjustment (1986 - 1993) and the period of guided deregulation (1994 -1998).GENERAL PERFORMANCE OF THE ECONOMY…

    • 4639 Words
    • 19 Pages
    Powerful Essays
    Read More

Related Topics