OIL EXPORT AND ECONOMIC GROWTH: EMPIRICAL EVIDENCE FROM NIGERIA

Muhammad Aliyu Tanko , Idris Bilyaminu Kadandani and Abdussalam S. Ademola
Volume 9 Issue 2

Abstract

This study examines the impact of oil export on economic growth in Nigeria for the period 1985 to 2020 using time series data generated from secondary sources. A model from endogenous growth theories known as AK growth model is put to empirical testing. The methodology adopted for this study was the Auto regressive Distributed Lag bounds testing approach. The result of the bounds test to cointegration indicates that there is long-run equilibrium relationship between oil export and Nigeria’s economic growth. And the result of the long run estimation revealed that oil export exerted a positive and significant relationship with economic growth in Nigeria. This finding suggests that oil exports have translated to a meaningful increase in real Gross Domestic Product per capita growth rate. However, in the short run the results reveal that oil export had a negative and significant relationship with economic growth in Nigeria which is contrary to long run equation results. Therefore, the study recommends that the Nigerian government needs to diversify her export composition by finding a viable alternative to crude oil export. The solid mineral sector could be a viable alternative. In order to boost its export and revenues, the government should invest in technologies for the processing of primary export commodities to ensure value addition. Furthermore, the government needs to provide domestic credits to export-oriented industries more especially Small and Medium Scale Enterprises (SMEs). This funding to export-oriented industries can be done by State-owned development banks. The capability of the Nigerian export Promotion Council (NEPC) and other institutions supporting trade should be enhanced by the government through capacity building programmes in partnership with regional and international trade bodies such as Economic Community of West African States (ECOWAS) and World Trade Organization (WTO) individually for officers of these organizations. This would ensure that these institutions are abreast with current happenings in international export markets. Keywords: ARDL, Oil export, Economic growth, Nigeria

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