The Impact of Oil Price Fluctation on the Economic Growth of Nigeria

Abass A. Shiro; Uche Amara Ibekwe

Shiro, Abass A Department of Finance, Faculty of Management Science, Ekiti State University Ado Ekiti, Ekiti-State, Nigeria
Ibekwe, Uche Amara Department of Actuarial Science and Insurance, University of Lagos, Akoka, Lagos. Nigeria

Keywords: Oil price fluctuation, Gross Domestic Product, Inflation Rate, Real Exchange Rate

Abstract

This study examined the impact of oil price changes on Nigeria's economic expansion. The aims of the study were to evaluate how oil price changes effect Nigeria's revenue generation and overall economic growth. Additionally, the impact of demand and supply market dynamics on Nigerian crude oil revenue generation was evaluated. Secondary data were gathered from CBN Statistical Bulletins and utilised for the study between 1997 and 2020. The Multiple Econometric Method was used to analyse the hypotheses, and a significance level of 0.5 was applied to the results. This research demonstrated that oil price changes have a significant impact on Nigeria's economic expansion. In addition, it was shown that the interest rate and inflation rate had a significant negative effect on Nigeria's economic growth. Based on the findings, it was established that the government should ensure that oil price changes are factored into the budget at manageable rates and implement macroeconomic policies that will reduce the level of inflation.