HERE is a complete project materials for Crude Oil Price And Economic Growth In Nigerian
TABLE OF CONTENTS
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Title Page
Certification
Dedication
Acknowledgement
Table of Contents
Abstract
CHAPTER ONE:
INTRODUCTION
1.1 Background to the Study
1.2 Statement of the Problem
1.3 Research Questions
1.4 Objective of the Study
1.5 Research Hypothesis
1.6 Significance of the Study
1.7 Scope of the Study
1.8 Organization of the Study
CHAPTER TWO:
LITERATURE REVIEW
2.1 Conceptual Review
2.1.1 Oil Price Shocks
2.2 Oil Price Shocks and Economic Activity
2.3 Theoretical Review
2.3.1 The Linear/symmetric Relationship theory of Growth
2.3.2 The Asymmetry in effect theory of growth Economics
2.4 The Dutch Disease Syndrome
2.4.1 Relationship between oil Price Shocks, Shock price Movement on Economic growth.
2.5 Empirical Research
2.6 Causes of Oil Price Shocks in Nigeria
2.7 Limitation of previous Study
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction
3.1 Methodology
3.2 Model of Specification
3.3 A Priori Expectation
3.4 Sources of Data
3.5 Measurement of Data
3.6 Data Analysis Techniques
3.7 Model Justification
3.8 Method of Evaluation
CHAPTER FOUR:
PRESENTATION AND ANALYSIS OF RESULTS
4.0 Introduction
4.1 Presentation of Result
4.2 Discussion of Results
4.4 Adjusted R-Squared
4.5 The F-Statistic
4.6 Breusch-Godfrey Serial Correlation LM Test
4.7 Test of Hypothesis
CHAPTER FIVE:
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary
5.2 Conclusion
5.3 Recommendation
REFERENCES
Appendix
Abstract
This study examines the effect of crude oil price on Nigerian economy from (1986-2015). In this research work, Ordinary Least Squares (OLS) technique was used and six variables were used in the empirical analysis.
Hence, real gross domestic product is assumed to be dependent variable, which depends on crude oil price (COP), real exchange rate (REER), government expenditure (GOVTEXP), inflation (INF) and money supply (MSP). The result reveals that crude oil price and exchange rate are significant determinants of Real GDP in Nigeria.
It is, therefore, recommended that revenue from oil should be used judiciously in diversifying the economy. Also, government pursuit of managed float exchange rate is desirable to ensure a substantial increase in the external reserve without significant damage of the exchange rate of the country.
CHAPTER ONE
INTRODUCTION
1.1Background of the Study:
The Nigerian economy is an oil dependent economy, therefore, the dependency of the Nigerian economy on oil proceeds as the major source of revenue of the country.Oil products are derived from crude oil and they include petrol, diesel, kerosene, natural gas, bitumen. Oil was discovered in Nigeria in 1956 at Oloibiri in the present Bayelsa State, after a century of searching (Dharam,1991).
Impact of Managerial Risk on Credit Facilities on Guaranty Trust Bank
Oil products are basically used in industries for production of goods and services and they are also used domestically for personal consumption in which the greater percentage of it comes from developing countries. The oil industry is very important to the Nigerian economy. It provides among other things the greatest part of the foreign exchange earnings and total revenue needed for socio-economic and political development of Nigeria.
The bulk of Nigerian crude oil is sold unrefined and when refined, the products range from petrol to heavy liquids for road tarring.
Government has been the custodian of petroleum and its products in Nigeria. Though, this brought a temporary growth in the economy, the price instability of the crude oil in the world market has led to the downfall of Nigerians economy in various sectors, such as the production, manufacturing and services sectors.
Oil price instability are not a new phenomenon: it has been a dominant feature in the oil market during the last two decades (Baumeister and Peerman, 2009). The market has been characterized with erratic movement of oil price since the 1970; moreover, there have been very large and sharp swings in the normal price of oil since the collapse of oil price in 1986(Sauter and Awerbuch, 2009),
For instance, CBN statistical bulletin (2011) shows that oil receipts accounted for 82.1% in 1974, 83% in 2008 and about 90% in 2010 and in 2015 Nigeria’s total oil revenue declined by 41.2% between January and April 2015. However, there was a marginal uplift in oil revenue between February and March, 2015. The reduction in oil revenue was caused by drop of crude oil prices in the international market, which in turn, led to a fall in crude oil and gas receiptsof the nation’s earnings respectively.
Moreover, in the late 1990’s and early 2000crude oil maintained its position as the major source of revenue of the federation account. This was shown in the year 2003 annual budget. Out of the estimated proved revenue of N1, 819.0214billion a total of N120.1789billion representing 61.58% is expected to be generated from oil.
Likewise, the revenue of petrol exports from the Nigeria’s total export revenue in 2010 was US$61,804million which is 87.6% of total export revenue; Nigeria has an increasing proportion of impoverished population and experienced continued stagnation of the economy (Okonjo-Iweala and Osafa-Kwaako, 2007).
However, it is empirically established that oil price is one of the most volatile prices which the significant impact on macroeconomic behavior of many developed and developing economies (Ferderer, 1996; Guo & Kliesen, 2005).
Nigeria is an open economy that has no real influence on the world price of oil, whereas, it is greatly impacted by the effect of global oil price volatility as an importer of refined petroleum products. The prices of petroleum products have been increased for about thirteen occasions between 1974 and 2002 from 16.8 kobo to N26 per litter.
The effect of oil prices on the macro-economic variables has been the subject of many studies. Most of these studies are concerned with the developed economies while few have recently showed concern with the developing country. Nigeria is faced with a more complicated situation in the sense that it sells its crude oil to foreign refiners, in which a general agreement on price set of exchange is reached beyond her control.
After the oil is refined into premium spirit, gasoline, and kerosene, it is sold back to Nigeria pegged to the price of wholesale gasoline on an exchange. The inability of Nigeria to refine most of her crude domestically place the country more on the importing side, making the macroeconomics extremely vulnerable to external oil price shocks.
Oil price volatility is like an airborne disease which Nigeria cannot avoid; this is because it affects every aspect of the Nigerian economy. For example, when there is an increase in the price of fuel, transportation would increase for the core poor and small scale entrepreneurs.
This leads to an increase in the cost of goods and services, employment becomes difficult, because employers would not want to employ since production costs are very high and employees would agitate for an increase in salaries and wages due to the increased cost of living.
In addition to higher petrol prices, the costs of producing electricity from petrol-powered generators have been too high, with black market operators. The impact of oil price volatility on Nigeria’s economy is quite complicated to analyze because oil has been the life wire of all economic activities in Nigeria.
Oil being the mainstay of the Nigerian economy plays a vital role in shaping the economic and political destiny of the country. Although Nigeria’s oil industry was founded at the beginning of the century, it was not until the end of the Nigeria civil war (1967-1970) that the oil industry began to play a prominent role in the economic life of the country.
Oil was discovered in Nigeria in 1956 at Oloibiri in the Niger Delta after half a century of exploration. Nigeria joined the ranks of oil producers in 1958 when its first oil field came on stream producing 5,100 bpd. After 1960, exploration rights in onshore and offshore areas adjoining the Niger Delta were extended to other foreign companies.
Since oil was discovering in commercial quantity in Nigeria, oil has dominated the economy of the country. In Nigeria, oil accounts for more than 90 percent of its exports, 25 percent of its Gross Domestic Product (GDP), and 80 percent of its government total revenues.
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