An Econometric Assessment of the Impact of Crude Oil Production on Health in Nigeria

Abstract

Health is a fundamental human right. It additionally implies the ability to live socially and economically productive lives. With rapid expansion of the Petroleum industry with oil accounting for seventy percent of the total export earnings during the 1970s, the Nigerian economy was re-structured from agriculture-driven to oil dependent. Expenditure on health depends on several factors. It is assumed that as natural resource grows, health expenditure will grow. However in case of Nigeria, this will depend on the oil revenue available to the government from the exportation of oil. The most significant environmental challenge facing the nation at present is that of pollution arising from oil exploration and production particularly in the oil-rich Niger-Delta region. Residents of these communities have suffered greatly from the effects of oil-spillage, exposure to oil-spills, gas flaring and other diminishing effects. The major objective of this study is to assess the impact of crude oil production on the health sector in Nigeria. This research paper uses the co-integration and Error Correction Methods (ECM) to analyze the relationship between Health, oil-sourced health revenue, gas flaring and domestic consumption of crude oil. After deriving the results of the error correction representation, we come to the conclusion that crude oil production has a significant impact on health in Nigeria. The study also makes one remarkable discovery and that is the negative impacts gas flaring has on health in Nigeria. It is therefore recommended that the Nigerian government should stop preference treatment of oil Multinationals and deal decisively with erring companies who deliberately distort the standard of health of Nigerians through oil spillage and gas flaring. Also, incentives should be given to oil companies to undertake best practices together with adequate reward for prompt adherence while more revenue from oil earning should be devoted to the health sector as this will surely impact significantly on the improvement of healthcare of Nigerians.