Comparative analysis of two resources-based economies: A study of policy recommendation toward sustainable development

Abstract

This is a comparative study between two resource endowed economies, Norway and Nigeria towards ascertaining the impact of the resources in the sustainable development (SD) of the countries. The findings are expected to be a highlight for the poor performing economy (Nigeria) and to replicate the tested and workable policies of Norway to Nigeria economic performance. Separate empirical estimates and analyses with quarterly data of (1992QI-2018QIV and 1992QI-2019QIV) for both countries (Nigeria and Norway) respectively are done for each in a time series manner. The results from the both autoregressive distributed lag (ARDL) and granger causality for both countries are as follows: Dutch disease is found via government spending effects and crude oil price on agriculture. Foreign direct investment (FDI), real gross domestic product (GDP) and real exchange rate are found positively impacting Nigerian agricultural sectors. The findings for the Norway's case are as follows: Dutch disease symptom is found via government spending effects, real exchange rate and crude oil price on manufacturing sector. From granger causality findings, there is a clear exposition of nexus among the government spending, oil price, FDI and real exchange rate which shows implication of government spending and oil price in both studies. This is a pointer towards existence of Dutch disease in both countries. This, notwithstanding, Norway as a country is among the best performing economies of the world due to efficient and effective policies. Nigeria having performed so poor is expected to consider Norway as a model in mitigating her Dutch diseases.