MACROECONOMIC IMPACT OF OIL PRICE VOLATILITY IN NIGERIA

AYENAJEH, Manasseh Eyedayi
ZUBERU, Emmanuel
EKUMANKAMA Ogbuagu. O 1
1 Corresponding author’s email: ooekums@gmail.com
PAPER PRESENTED AT THE ACCOUNTING AND FINANCE RESEARCH ASSOCIATION CONFERENCE 5 - 7 NOVEMBER 2018 UNIVERSITY OF CALABAR
CALABAR, NIGERIA

Abstract
The study examined the macroeconomic impact of oil price volatility in Nigeria (1985 – 2016). The
Nigerian economy has been completely reliant on oil and also the basis upon which government
budgeting, revenue distribution and capital allocations are determined. In the face of the declining
and fluctuating oil revenue, it has become necessary to reassess the effects of oil price volatility on
major macroeconomic growth variables in the country. Therefore the study has the objectives of
determining whether there is a significant relationship between oil price volatility and economic
growth in Nigeria, to evaluate the impact of oil price volatility on industrial output in Nigeria; and
to evaluate the impact of oil price volatility on the exchange rates in Nigeria. Along these lines also,
three hypotheses will be tested to validate the results of the findings. Ex-post facto research design
was employed, and data collected from secondary sources. Ordinary Least square regression
technique was used and data was analyzed using Autoregressive Diagnostic Lag on E-view software
package. The study reveals that there is a long relationship between oil price and economic growth,
industrial output and exchange rate in Nigeria. The study recommends that government should
diversify the economy to avoid the effects of oil price changes on the growth of the nation’s economy
by maximizing benefits from agricultural and other key sectors, invest more on human capital
development and design the optimal policy mix that would help to efficiently harness the nations
natural and human resources.
Key Words: Macroeconomic, Volatility, Cointegration, Economic Growth.

DOWNLOAD FULL TEXT HERE

https://afra.org.ng/wp-content/uploads/2022/03/pro2018030.pdf

Leave a Reply

Your email address will not be published.