The Relative Impact Of Oil And Non-oil Exports On Economic Growth In Nigeria: 1983-2007

The Relative Impact Of Oil And Non-oil Exports On Economic Growth In Nigeria: 1983-2007

Abstract

The study is made up of two independent models, Gross Domestic Product( GDP) and Investment independently. The independent variables oil painting import,Non-oil import, Real exchange rate and Affectation rate were modeled to capture their effect on GDP and Investment independently.

The study employed Log Linear Model. Following the empirical findings in this study, we observed that,Non-oil import haven’t contributed a lot to profitable growth in Nigeria but other pointers ply enough pressure on the strength of the frugality, substantiation from the result of the first model. Judging from the result of the alternate model, Oil import proves a negative non significant variable with investment growth in Nigeria.

The study recommends applicable profitable programs, institutional reforms and massive political will for the country to address the issues of abating exportation ofNon-oil sector and the trap of Dutch Disease associated with oil painting- reliance.

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LIST OF TABLE

Unit Root Test for Stationarity——————————————- 42

Co-integration Result—————————————————— 45

Modeling Log of Differenced GDP by OLS————————— 45

Modeling Log of Differenced INV by OLS—————————- 46

Summary of t- statistic test for model 1———————————- 50

Summary of t- statistic test for model 2———————————- 52

TABLE OF CONTENT

Title runner—————————————————————- i

blessing runner———————————————————- ii

fidelity————————————————————– iii

Acknowledgement—————————————————– iv

Abstract—————————————————————– v

List of tables———————————————————– vi

Table of content——————————————————- vii

CHAPTER ONE

preface——————————————————- 1

Background of study——————————————— 1

Statement of problem——————————————– 3

ideal of the study——————————————- 5

Statement of thesis—————————————– 5

Significance of the study—————————————- 6

compass and limitations of the study—————————– 6

CHAPTER TWO

Meaning of oil painting andnon-oil exports—————————- 7

A detail literal perspective on oil painting in Nigeria————– 7

oil painting and profitable programs in Nigeria————————- 10

The Dutch- Disease———————————————- 15

The smash and burst ages in oil painting sector and policy response—– 17

Macroeconomic programs and structure ofNon-oil import in Nigeria- 22

oil painting import,Non-oil import and profitable growth in Nigeria——- 26

Empirical Literature—————————————————- 29

CHAPTER THREE

exploration methodology——————————————————– 35

Model Specification—————————————————— 35

system of Evaluation—————————————————- 37

CHAPTER FOUR

Data donation——————————————————— 41

Data Analysis———————————————————— 44

CHAPTER FIVE

Summary, Conclusion and Recommendation————————— 58

Summary—————————————————————— 58

Conclusion—————————————————————- 61

Recommendation——————————————————— 62

Bibliography——————————————————— 66

Excursus

Chapter One

Preface

The Background Of The Study

oil painting, a veritably protean and flexible,non-reproductive, depleting, natural( hydrocarbon) is a abecedarian input into ultramodern profitable exertion, furnishing about 50 of the total energy demand in the world.( AnyanwuJ.C. et al, 1997)

Petroleum or crude oil painting is an unctuous, bituminous liquid conforming of a admixture of numerous substances, substantially the element of carbon and hydrogen known as hydrocarbons. It also contains veritably small quantities ofnon-hydrocarbon rudiments, principal amongst which are sulphur( about0.2 to0.6 in weight), also nitrogen and oxygen.( AnyanwuJ.C. et al, 1997)

Non-oil exports comprises of agrarian products, solid mineral, cloth, tyre, force,etc. it’s made up of every other thing we export, except petroleum products. In the decades of the 1960s and 1970s, the Nigeria frugality was dominated by agrarian commodity exports. similar goods include cocoa, groundnut, cotton and win yield. From the medial 1970s, crude oil painting came the main import yield of the Nigerian frugality.( AnyanwuJ.C. et al 1997)

The development of the petroleum( oil painting) assiduity in the country began in 1909. It started with disquisition conditioning by the German Bitumen Corporation, but their hunt for oil painting seized after the First World War because the Germans started the war and lost in the war. With Nigeria being under British sectorial control, it was only natural that the Germans had to stop their disquisition conditioning.

In 1937, an oil painting probing license was granted to shell D’Arcy Exploration parties. The first marketable discovery of crude oil painting in Nigeria was made in 1956 by shell at Oloibiri. The company started product and in 1961 the Civil government of Nigeria issued ten oil painting probing licenses on the international shelf to five companies. Each license covered was subject to the payment of N1 million. With this generous concession full- scale on- reinforcement and off – reinforcement oil painting disquisition began.

oil painting was set up in marketable amounts at Oloibiri in the Niger delta, farther discoveries at Afam and Boma established the country as an oil painting- producing nation. The Nigerian crude oil painting is described as a sweet type because of its lightness and its low sulphur content. It was largely sought- after in the transnational oil painting request.

The global perception of Nigeria is that of a really blessed oil painting producing nation, but with a growing poverty indicator.( Maaji Umar YAKUB, 2008). The problems of low profitable performance of Nigeria can not be attributed solely to insecurity of earnings from the oil painting sector, but as a result of failure by government to use productively the earnings from the import of crude oil painting from the medial 1970s to develop other sectors of the frugality. Nigeria is among the poorest countries in the world, with the poverty prevalence estimated at 54 in 2006. The frugality has been mainly unstable, a consequence of the heavy dependence on oil painting profit and the volatility in its prices. The oil painting smash of the 1970s led to the neglect ofnon-oil duty profit, expansion of the public sector, and deterioration in fiscal discipline and responsibility. In turn, oil painting- reliance exposed Nigeria to oil painting price volatility which threw the country’s public finance into disarray.

This study will examine the relative impact of oil painting andnon-oil import on profitable growth in Nigeria.

Statement Of The Problem

oil painting is a major source of energy in Nigeria and the world( in general). oil painting being the dependence of the Nigerian frugality plays a part, vital part in shaping the frugality and political fortune of the country. It was towards the end of the Nigerian civil war( 1967- 1970) that the oil painting assiduity began to play a prominent part on the profitable life of the country.

Non-oil product on the other hand plays an important part in the profitable growth and development of the country. Non-oil exports, especially agrarian product like groundnut, win oil painting, cotton, natural rubber, coffee, goo Arabic, sesame seed,etc. was our main stay before the period of the oil painting smash. It was during that period( that is, period of oil painting smash) that Nigerians neglectednon-oil exports to an extent.

Nigeria can be distributed as a country that’s primarily pastoral, that is, it depends on primary product import( especially, oil painting product). Since the attainment of independence in 1960 it has endured ethnical, indigenous and religious pressures, magnified by significant difference in profitable, educational and environmental development in the south and in the north. This could be incompletely attributed to the major discovery of oil painting in the country which affects and is affected by profitable and social factors.

Crude oil painting discovery has had certain impact on the Nigerian frugality both appreciatively and negatively. On the negative side, this can be considered with respect to the girding communities within which the oil painting wells are exploited. Some of these communities still suffer environmental declination, which leads to privation of means of livelihood and other profitable and social factors. Although, large proceeds are attained from the domestic deals and exports of petroleum products, its goods on the growth of the Nigerian frugality with regard to returns and productivity is still questionable.

Hence, there’s need to estimate the relative impact of oil painting andnon-oil exports on profitable growth in Nigeria. In the light of the study, the main ideal is to assess the relative impact of oil painting andnon-oil import on the Nigerian frugality.

Below are the exploration questions of the study.

1. What’s the relative impact of oil painting andnon-oil exports on investment in Nigeria?

2. What’s the relative impact of oil painting andnon-oil exports on profitable

growth in Nigeria?

Objects Of The Study.

The broad ideal of this study is to probe the impact of oil painting andnon-oil exports on profitable growth in Nigeria. still, the specific objects are;

1. To determine the relative impact of oil painting andnon-oil exports on

investment in Nigeria.

2. To determine the relative impact of oil painting andnon-oil exports on

profitable growth in Nigeria.

Exploration Thesis

The following suppositions are tested in this study;

1. Both oil painting andnon-oil exports have no significant impact on investment in Nigeria.

2. Both oil painting andnon-oil exports have no significant impact on profitable growth in Nigeria.

Significance Of The Study

Countries of the world moment are engaging themselves more in transnational trade to earn foreign currency, maintain a fat Balance of Payment( BOP), establish good relationship with nonnatives and utmost of all achieve profitable growth. Nigeria as a country isn’t left out in the transnational trade. Our import goods can de divided into oil painting andnon-oil.

It’s important to study the relative impact of oil painting andnon-oil exports on profitable growth in Nigeria to ascertain whether the exportation is contributing to our profitable growth and per capita income or whether we’ve just been wasting our coffers.

Compass And Limitations Of The Study

This exploration work covers the impact created on profitable growth by oil painting andnon-oil exports. The geographical area involved is Nigeria. The study is as such a relative bone . The variables of interest are oil painting import,non-oil import, real interest rate, affectation rate, investment and GDP. The time period is from 1983- 2007.