Abstract
With decreasing demand for fossil oil globally, international oil prices have fallen continuously, reaching an all time low of below $30 lately. This has several implications on the Nigerian public finance structure at national and sub-national levels. The study investigated the impact of this plunge on the economic development of Cross River State, Nigeria and found that international oil price shocks affected the State’s economy inversely, while a positive but insignificant relationship existed between the other model variables and the economic growth of the State. Consequently, the study recommends that CRS government should de-emphasize the over-reliance on crude oil revenue and seek and optimize earnings from other non-oil sectors of the economy.Further, the State’s economy should be diversified to boost internally generated revenue with less dependence on Federal government revenue allocation. Finally, there should be effective machinery for checks and balances put up by the government to stem fiscal abuse and wastage of resources by the ministries, departments and agencies in the State.
Highlights
Since the discovery of crude oil in commercial quantities in the country, Nigeria has for so long depended majorly on oil revenue to fund her developmental programmes
One percent increases in average crude oil price, Federal allocation to CRS and total expenditure of CRS led to marginal decrease in the gross State product of CRS by $0.50, N0.33 million and N0.07 million respectively
Average crude oil production quota and total internally generated revenue of CRS have small positive impacts on the growth of CRS economy. This is true as one percent increases in average crude oil production quota and total internally generated revenue of CRS led to 1.36 and 1.40 increases in CRS gross State product respectively
Summary
Since the discovery of crude oil in commercial quantities in the country, Nigeria has for so long depended majorly on oil revenue to fund her developmental programmes. The meltdown resulted in credit crunch, declining asset values and a fall in economic activities and output, a reduction in demand for oil and oil prices fell from US$147 in July 2008 to below US$45 by December 2008 (Nwankwo, 2015). From its assigned production quota, it is estimated that Nigeria could produce 2.5 million barrels of crude oil per day. The present conundrum could be traced to the last quarter of 2014, when there was a noticeable decline in global demand for oil as a result of the retardation in economic activity
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
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 call
