The latest topic focuses on the Relative Impact Of Oil And Non-Oil Exports On Economic Growth In Nigeria from 1983-2007.
ABSTRACT
The study is made up of two independent models, Gross Domestic Product (GDP) and Investment respectively. The independent variables Oil export, Non-oil export, Real exchange rate, and Inflation rate were modeled to capture their effect on GDP and Investment respectively.
The study employed Log Linear Model. Following the empirical findings in this study, we observed that, Non-oil export have not contributed a lot to economic growth in Nigeria but other indicators exert enough pressure on the strength of the economy, evidenced by the result of the first model. Judging from the result of the second model, Oil export proves a negative nonsignificant variable with investment growth in Nigeria.
The study recommends appropriate economic policies, institutional reforms, and massive political will for the country to address the issues of dwindling exportation of the Non-oil sector and the trap of Dutch Disease associated with oil dependency.
CHAPTER ONE
INTRODUCTION
1.1THE BACKGROUND OF THE STUDY
Oil, a very versatile and flexible, non-reproductive, depleting, natural (hydrocarbon) is a fundamental input into modern economic activity, providing about 50% of the total energy demand in the world. (Anyanwu J.C. et al, 1997)
Petroleum or crude oil is an oily, bituminous liquid consisting of a mixture of many substances, mainly the element of carbon and hydrogen known as hydrocarbons. It also contains very small amounts of non-hydrocarbon elements, chief amongst which are sulphur (about 0.2 to 0.6% in weight), then nitrogen and oxygen. (Anyanwu J.C. et al, 1997)
Non-oil exports comprise of agricultural products, solid minerals, textiles, tyre, manpower, etc. it is made up of every other thing we export, except petroleum products. In the decades of the 1960s and 1970s, the Nigerian economy was dominated by agricultural commodity exports. Such commodities include cocoa, groundnut, cotton and palm produce. From the mid 1970s, crude oil became the main export produce of the Nigerian economy. (Anyanwu J.C. et al 1997)
The development of the petroleum (oil) industry in the country began in 1909. It started with exploration activities by the German Bitumen Corporation, but their search for oil was 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 exploration activities.
In 1937, an oil prospecting license was granted to shell D’Arcy Exploration parties. The first commercial discovery of crude oil in Nigeria was made in 1956 by Shell at Oloibiri. The company started production and in 1961 the Federal government of Nigeria issued ten oil prospecting licenses on the continental shelf to five companies. Each license covered was subject to the payment of N1 million. With this generous concession full-scale on-shore and off–shore oil exploration began.
Oil was found in commercial quantities at Oloibiri in the Niger Delta, further discoveries at Afam and Boma established the country as an oil-producing nation. The Nigerian crude oil is described as a sweet type because of its lightness and its low sulphur content. It was largely sought-after in the international oil market.
Keywords:
What is the negative impact of oil on Nigeria's economy?
What are the problems of oil in Nigeria?
How much does oil contribute to the Nigerian economy?
How does crude oil export affect economic growth in Nigeria?
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