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Oil prices, armed conflict and government revenue in Nigeria

Author

Listed:
  • Udoma Johnson Afangideh
  • Augustine Ujunwa
  • Angela Ifeanyi Ukemenam

Abstract

Purpose - Persistent wave of armed conflicts – militancy and terrorism – and the mono-cultural structure of the Nigerian economy, as well as extensive reliance on revenue from crude oil, highlights how external vulnerabilities, weakening internal structure and insecurity could significantly exacerbate public revenue loss. Understanding the nature, trend and impact of these factors on government revenue is one of the questions that still remain unsolved. The purpose of this paper is to examine the impact of global oil prices, militancy and terrorism on government revenue in Nigeria. Design/methodology/approach - The study focusses on the state-failure and frustration-aggression hypotheses to explain the nature and trend of armed conflicts in Nigeria. The autoregressive distributed lag (ARDL) model is used to examine the effect of global oil prices, militancy and terrorism on government revenue. Findings - The study reveals that crude oil price, terrorism and militancy have significant negative effect on government revenue in short- and long-run Nigeria. Evidence from the study therefore supports the theory that macroeconomic fluctuation is largely determined by endogenous and exogenous factors in Nigeria. Research limitations/implications - In view of this review, future studies should empirically analyse the interactive impact of militancy, terrorism and global oil prices on government expenditure or a combination of government revenue and expenditure. Originality/value - The study provides evidence on the role of internal and external factors on macroeconomic fluctuation, and recommended appropriate suite of policies that could mitigate external and internal vulnerabilities, especially during upsurge in armed conflicts.

Suggested Citation

  • Udoma Johnson Afangideh & Augustine Ujunwa & Angela Ifeanyi Ukemenam, 2018. "Oil prices, armed conflict and government revenue in Nigeria," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 13(5), pages 1196-1210, November.
  • Handle: RePEc:eme:ijoemp:ijoem-04-2017-0118
    DOI: 10.1108/IJoEM-04-2017-0118
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    Citations

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    Cited by:

    1. Hamdy Ahmad Aly Alhendawya & Mohammed Galal Abdallah Mostafa & Sozan Galal Elkananib & Neveen Mohsen Ahamed Zakic & Mousa Gowfal Selmeya, 2023. "Using Generalized Linear Model to Determine the Impact of Oil Price Fluctuations on the Egyptian Public Budget," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 92-99, March.
    2. Nuhu, Said, 2023. "Natural gas extraction activities and host communities concerns in Sub-Saharan Africa: A reflection on the historical riots in Mtwara, Tanzania," Resources Policy, Elsevier, vol. 86(PA).

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