Abstract
This paper investigated how oil revenue and the activities in the oil industry affected the size of income accrue to each Nigerian (Per capita income) from 1980 to 2019. The variables were sourced from the World Bank’s World Development Indicators (WDI), OPEC Statistics, Baker Hughes Rig Count and the central bank of Nigeria statistical bulletin. Using the AutoRegressive Distributional Lag (ARDL) we observed that explorative activities of crude oil in Nigeria positively impacted the size of individual income. The magnitude of the impact was massive irrespective of time; a 1% increase in exploration increases the size of individual income by 0.4786% in the long run and 0.6030% in the short run. The interaction of rigs by output (interaction of rig-count and oil-production) negatively impacted the size of individual income. This implies that the size of individual income in Nigeria is sensitive to the nature of the explorative environment of the Nigerian oil industry.
Highlights
The volatilities in crude-oil prices are drawn from three major sources, demand shocks, supply shocks, and industrial action that affects production, (Kilian, 2006)
We agree no less with other scholars and argue that domestic crude-oil activities have not contributed meaningfully to the growth of the Nigerian economy, rather it has resulted in negative activities such as land and water pollution, social unrest and negative externality
Nigeria as a net crude oil exporting country and a member of the OPEC bloc has setbacks that impede her from reaching her required oil production benchmark by OPEC
Summary
The volatilities in crude-oil prices are drawn from three major sources, demand shocks, supply shocks, and industrial action that affects production, (Kilian, 2006) The outcome of these shocks contributes significantly to financial and human capital development; fiscal and monetary policy outcomes and directly impacted on economic growth of the oil producing states, (Rentschler, 2013 and Baffes et al, 2015). International Journal of Research in Business & Social Science 10(8) (2021), 218-227 measure of industry factor can be misleading This is the mother of the conflict in the theory of rig-counts and oil price relationship, (Bokenov, 2018). Whereas section four and five discusses the finding and concluded the paper with recommendation drawn from the discussions
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