Citation:

Bredino Samson, Orenuga Babatunde, Bilewu Olukayode Abiodun. "An Empirical Analysis of Oil Revenue Savings and Economic Growth in Nigeria (1981 – 2020)" International Research Journal of Economics and Management Studies, Vol. 2, No. 1, pp. 16-23, 2023.

Abstract:

The study looked into how lowering oil prices might affect economic expansion. The primary objective of the study is to examine the long-term relationship between Nigerian economic growth and savings from crude oil revenues. The Central Bank of Nigeria statistical bulletin was used to create time series data on the gross domestic product, state spending, and sovereign wealth fund for the years 1981 through 2021. The data were analysed using the Augmented Dickey Fuller (ADF) test, Johansen co-integration, and Vector Error Correction tests. Findings from the study show that there an inverse or negative relationship between government expenditure, soverign wealth fund (used as proxy for oil revenue savings) and economic growth. Oil revenue and economic growth also have a direct and negative relationship. Consequently, in accordance with the study's findings, the following suggestions were made; the establishment of a committee to not only manage but closely monitor the agencies responsible for the collection and disbursement of oil revenue in order to ensure that all leakages are blocked, as well as the diversification of the Nigerian economy in order to reduce overdependence on oil revenue and to insulate the economy against economic shocks likely to emanate from volatility in oil prices.

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Keywords:

Gross Domestic Product, Sovereign Wealth Fund, Government Expenditure, Oil Revenue.