COMPREHENSIVE ANALYSIS OF THE EFFECT OF OIL AND NON-OIL REVENUES ON ECONOMIC GROWTH IN NIGERIA
Abstract:Revenue generation as the funding source for Nigeria's
economic growth activities was challenging due to the government's
mismanagement, tax avoidance, and corrupt practices due to the COVID-19
pandemic. The global crude oil prices declined. The challenges make Nigeria's
federal government over-dependent on oil-generated revenues to experience
several setbacks in achieving its economic growth goals. However, for the last
decade, the Government has also diversified the economy and focus on the non-oil
area. Thus, this study examined the effects of generating oil and non-oil
revenues on Nigeria's economic growth from 1989 through 2018 using secondary
data extracted in the Central Bank of Nigeria's statistical bulletin. The study
employed the model for analytical co-integration and error correction. Similar
analytical processes were applied to the multivariate data on components of oil
and non-oil revenue, exchange rates, and real gross domestic products. Results
generated indicated that the oil revenue harms real gross domestic products in
Nigeria, but this is the same with effects reported from non-oil revenue.
Nonetheless, Nigeria's exchange rate gives a positive sign and statistical
significance for real gross domestic products. Consequently, the study opined
that the continuing decline in global crude oil prices, resistance from
insurgents in Nigeria's oil-producing area, the Nigerian Government's
profligate expenditure, the global COVID-19 health pandemic, among other
factors, are harming the economic growth of Nigeria.