CRUDE OIL REVENUE AND ITS EFFECT ON ECONOMIC DEVELOPMENT: THE NIGERIA’S SCENARIO
Empirically, this study sought to investigate crude oil revenue and its effect on Nigerian economic development, with the usage of yearly time-series data on variables which were collected from Word Bank database, Nigerian federal ministry of finance, Nigerian Central Bank, and Nigerian National Bureau of Statistics for the periods between 1981 and 2019. Dependent variable-gross national income per capita (GNIpc) was used to proxy economic development, whilst government total expenditure (GTEXP), oil revenue (OIL_REV), exchange rate (EXCHR) and external reserves (ETR) were used as independent variables. The study adopted Pairwise Granger Causality approach to analyse causal relationship between study variables. The findings of the study revealed that government total expenditure (GTEXP), oil revenue (OIL_REV), exchange rate (EXCHR), and external reserves (ETR) Granger cause gross national income per capita (GNIpc), but gross national income per capita (GNIpc) does not Granger cause government total expenditure (GTEXP), oil revenue (OIL_REV), exchange rate (EXCHR), and external reserves (ETR), implying that unidirectional causality runs from all independent variables to dependent variable. Thus, the study recommended that policymakers should ensure funds being generated by oil revenue be effectively used for the benefits of all Nigerians. And also, fixed exchange rate regime should be focused on to keep the value of the currency within a narrow band.
Keywords: Crude oil, Economic Development, Resource-curse Thesis
