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Nigeria’s Volatile Oil Revenue: Is There a Cause for Concern?

Author

Listed:
  • Rotimi Ayoade Ogunjumo

    (Department of Economics, Landmark University, Omu-Aran, Nigeria;)

  • Nuhu Musa

    (Department of Economics, Kogi State University, Anyigba, Nigeria.)

  • Ibrahim Adama

    (Department of Economics, Landmark University, Omu-Aran, Nigeria;)

  • Silas Idoko Abu

    (Department of Economics, Kogi State University, Anyigba, Nigeria.)

  • Hitlar Inedu

    (Department of Economics, Kogi State University, Anyigba, Nigeria.)

  • Salami Hamzat

    (Department of Economics, Kogi State University, Anyigba, Nigeria.)

  • Stephen Adesina Ibitowa

    (Department of Economics, Landmark University, Omu-Aran, Nigeria;)

Abstract

This study, unlike previous studies, investigates the impact of volatile oil revenue on economic growth in Nigeria from 1986 to 2020. The study adopts the Auto-Regressive Distributed Lag technique (ARDL) to analyze the data. The results show that in the short-run, oil revenue volatility significantly depressed economic growth. In the long-run, however, oil revenue volatility improves economic growth in the country. The study therefore recommends that governments and policymakers in Nigeria should vigorously pursue policies that would reduce the reliance on oil revenue through greater economic diversification; otherwise economic growth may worsen in the short-run.

Suggested Citation

  • Rotimi Ayoade Ogunjumo & Nuhu Musa & Ibrahim Adama & Silas Idoko Abu & Hitlar Inedu & Salami Hamzat & Stephen Adesina Ibitowa, 2024. "Nigeria’s Volatile Oil Revenue: Is There a Cause for Concern?," International Journal of Energy Economics and Policy, Econjournals, vol. 14(2), pages 299-303, March.
    • Handle: RePEc:eco:journ2:2024-02-29
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    References listed on IDEAS

    as
    1. Moayad H. Al Rasasi* & John H. Qualls & Bander K. Algamdi, 2019. "Oil Revenues and Economic Growth in Saudi Arabia," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 5(3), pages 49-55, 03-2019.
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    4. Mohammed, Jabir Ibrahim & Karimu, Amin & Fiador, Vera Ogeh & Abor, Joshua Yindenaba, 2020. "Oil revenues and economic growth in oil-producing countries: The role of domestic financial markets," Resources Policy, Elsevier, vol. 69(C).
    5. Bollerslev, Tim, 1986. "Generalized autoregressive conditional heteroskedasticity," Journal of Econometrics, Elsevier, vol. 31(3), pages 307-327, April.
    6. Zhang, Yue-Jun & Yao, Ting & He, Ling-Yun & Ripple, Ronald, 2019. "Volatility forecasting of crude oil market: Can the regime switching GARCH model beat the single-regime GARCH models?," International Review of Economics & Finance, Elsevier, vol. 59(C), pages 302-317.
    7. Musa, Nuhu, 2021. "Impact of Exchange Rate Volatility on Inflation in Nigeria," Journal of Contemporary Research in Business, Economics and Finance, Learning Gate, vol. 3(1), pages 26-38.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Freddy Ronalde Camacho-Villagomez & Yanina Shegia Bajaña-Villagomez & Andrea Johanna Rodríguez-Bustos, 2024. "Estimating the Impact of Oil Price Volatility on the Ecuadorian Economy: A MIDAS Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 371-376, July.

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    More about this item

    Keywords

    Oil Revenue Volatility; ARDL; Short-run; Long-run; Nigeria;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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