THE IMPACT OF DWINDLING OIL PRICE ON THE NIGERIA ECONOMY

ABSTRACT

The global oil price in recent years has been on a downward slope which has affected many developed and developing countries. During the fourth quarters of the year 2020, amidst the pandemic, the global oil price dropped drastically, the price as at that time was $21pb.  Hence, this study investigates the impact of the dwindling oil price on the Nigeria economy. The oil revenue has been the major source of Nigeria revenue over the years due to the Government inability to develop other sectors. Also, the oil price has been used by the Nigerian government as the benchmark for its budget preparations, hence, its heavy effect on the Nigeria economy. Thus, there’s the need to assess the impacts of the dwindling oil price on the Nigeria economy. The researcher uses secondary data for the research work, which were source from various CBN bulletins and statistical data. The OLS regression analysis was used to determine the relationship between the oil price and the Nigeria economy between 2010 and 2020. The findings reveal that the dwindling oil price has had adverse effect on the Nigeria economy. It was concluded from the study that the development of any nation is tied to the ability of the country to industrialize  and diversify its economy. The study recommended amongst others; that the Government need to as a matter of urgency diversify the economy by developing other sectors and provision of infrastructural facilities like power, water etc. which can be a potential to sustain a low interest rate regime through its positive impact on the cost of doing business. 

TABLE OF CONTENTS

Cover Page

Title page      -           -           -           -           -           -           -           -           i

Declaration   -           -           -           -           -           -           -           -           ii

Certification  -           -           -           -           -           -           -           -           iii

Dedication    -           -           -           -           -           -           -           -           iv

Acknowledgements  -           -           -           -           -           -           -           v

Table of contents      -           -           -           -           -           -           -           vi

Abstract        -           -           -           -           -           -           -           -           viii

 

CHAPTER ONE

INTRODUCTION

1.1     Background of the study        -           -           -           -           -           1

1.2     Statement of the problem-       -           -           -           -           -           2

1.3     Objective of the study-           -           -           -           -           -           4

1.4     Research Question-     -           -           -           -           -           -           4

1.5     Statement of hypothesis-        -           -           -           -           -           5

1.6     Significance of the study-       -           -           -           -           -           5

1.7     Scope of the study-     -           -           -           -           -           -           6

1.8     Limitation of the study-          -           -           -           -           -           6

1.9     Operational definition of terms-         -           -           -           -           7

 

CHAPTER TWO

LITERATURE REVIEW

2.1     Conceptual framework-          -           -           -           -           -           8

2.1.2  Brief History of Oil in Nigeria-          -           -           -           -           9

2.1.3 Nature of Oil and the Oil Market        -           -           -           -           10

2.1.4 What Drives the Price of Oil-  -           -           -           -           -           13

2.1.5  Concept of Economic Growth            -           -           -           -           15

2.1.6 Oil Price Shocks and Economic Activities: Exporting

 Countries vs Importing Countries   -           -           -           -           -           19

2.1.7  The Dutch Disease Syndrome -           -           -           -           -           21

2.1.8  Spectrum of Petroleum Industry in Nigeria    -           -           -           21

2.1.9  Oil Price Volatility and the Global Perspectives        -           -           24

2.1.10 Concept of Industrial Output -           -           -           -           -           29

2.1.11 Concept of Exchange Rate    -           -           -           -           -           31

2.2   Theoretical Framework-           -           -           -           -           -           34

2.2.1  The Heckscher Ohlin Theory  -           -           -           -           -           34

2.2.2  The Structuralist Theory         -           -           -           -           -           35

2.2.3  Classical Theory of Economic Growth          -           -           -           36

2.2.4 Resource Endowment Theory of Growth       -           -           -           36

2.2.5 New Institutional Economist   -           -           -           -           -           37

2.3   Empirical Review-                    -           -           -           -           -           38

 

CHAPTER THREE

METHODOLOGY

3.1     Research design-         -           -           -           -           -           -           44

3.2     The Study Area           -           -           -           -           -           -           44

3.3     Population and Sampling Procedure- -           -           -           -           44

3.4     Data Collection Techniques    -           -           -           -           -           45

3.5     Data Analysis Techniques-     -           -           -           -           -           45

 

 

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULT

4.1     Data presentation-       -           -           -           -           -           -           49

4.2     Data Analysis and Interpretation        -           -           -           -           51

4.3     Test of Hypothesis -    -           -           -           -           -           -           53

4.4     Result and discussion-                        -           -           -           -           -           55

 

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1     Summary of Findings -           -           -           -           -           -           57

5.2     Conclusion-     -           -           -           -           -           -           -           57

5.3     Recommendation-       -           -           -           -           -           -           58

          References-                 -           -           -           -           -           -           60