Abstract
The bursting of crude oil prices in the international market since mid-2014 has resulted in dwindling oil revenue, which has led to economic recession in Nigeria. The recession has further exacerbated existing socioeconomic problems bedeviling the country. In the light of this, we examined the effect of government revenues (oil and non-oil revenues) on economic growth, both in the short-run and the long-run using autoregressive distributed lag method. Our findings show that government revenues are indispensable to economic growth in Nigeria. In addition, we found that economic growth is more responsive to oil revenue than non-oil revenue. Based on our findings, we advocate for effective and efficient use of government revenues. Furthermore, since oil revenue fluctuates more than non-oil revenue, we further advocate for creation of an enabling business environment geared towards improving the contribution of the non-oil sector to the government revenue base.
Highlights
Nigeria is one of the oil producing countries in the world with crude oil proven reserve of about 37.2 million barrels as at 2010
Real GDP used to capture economic growth is measured in local currency unit, secondary school enrolment stands for human capital, foreign direct investment captures foreigners’ investment in Nigeria, openness of trade is the summation of export and import divided by GDP multiplied by 100 and investment is measured using gross fixed capital formation scaled by GDP
The results show that the null hypothesis of no unit toot test cannot be rejected at the level for all the variables considered in this study
Summary
Nigeria is one of the oil producing countries in the world with crude oil proven reserve of about 37.2 million barrels as at 2010. Oil revenue accounted for 66.96% of total revenues in the 1980s and rose to 75.21% in the 2000s.1. The importance of oil revenue to the country’s economy is enormous. It forms the benchmark for the annual budget formulation and implementation. History shows that the oil revenue is susceptible to fluctuations of the oil price in the international market. This often results in the volatility of the revenue, which has had harmful effects on government expenditure with an ultimate effect on the economy. The recent development in the country readily supports the above assertion. The Isiaka Akande Raifu and Abiodun Najeem Raheem / European Journal of Government and Economics 7(1), 60-84
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
