THE IMPACT OF OIL REVENUE ON THE ECONOMIC GROWTH IN NIGERIA (A CASE OF STUDY NIGERIA)

This research work was conducted to investigate the impact of the oil industry on the economic growth performance of Nigeria. In the process of the research, the ordinary least square (OLS) regression technique was employed. Considering the impact of time on changes in economic variables, the analysis was carried out using the simple regression method in which economic growth in Nigeria , proxy for economic growth was used as the dependent variable, while the oil Revenue (OREV) and time appeared as repressor’s. A two-tailed test of 5% significant levels were conducted indicating that the two explanatory variables did not have any significant impact on growth performance of the Nigerian economy within the same period. The researcher therefore recommends that government should formulate appropriate policy mix that would motivate the firm in the oil sector to enhance improved performance and contribution of the sector.

 

     TABLE OF CONTENTS 

Title page 

Acknowledgement 

Approval page 

Dedication 

Abstract 

Table Of Content

1.0  Introduction 

1.1 The  Background  of the study 

1.2 Statement Of research problems 

1.3 Research Question 

1.4 Objective of the study 

1.5 significance of the study 

1.6 Scope and limitation of the study 

1.7 Definition Of terms

2.1 Introduction 

2.2  Conceptual Framework

2.3 Theoretical Framework

2.3.1 Browns theory of taxation 

2.3.2 Ability to pay approach 

2.4 Other sub-Heading

3.0 Research methodology 

3.1 Introduction 

3.2 Research design 

3.3 Target Population 

3.4 Sample Size and Sampling Technique

3.5 Method of Data Collection 

3.6 Method of Data Analysis 

3.7 Conclusion

4.0 Introduction 

4.1 Data presentation and analysis 

4.2  Table One: sex Distribution 

4.3 Table Two: Distribution 

4.4 Table Three : Educational Qualification

4.5 Table Four: Position held by respondents in the organization 

4.6 Table Five: In what department do you 

4.7 Table Six: Oil revenue and economic growth has significant relationship

4.8 Table Seven: Increase in oil revenue leads to company growth in Nigeria 

4.9 Table Eight: Oil revenue is yardstick for economic growth 

4.10 Table Nine: Oil revenue have impact on the economic growth 

4.11 Table Ten: A decrease in oil revenue would affect the economy growth in Nigeria 

4.12 Table Eleven: 75% of economic growth is contribution by oil revenue 

4.13 Table Twelve: Legislative act on oil revenue affect oil sector revenue in Nigeria 

4.14 Table Thirteenth: Oil sector revenue affect Nigeria economy 

4.15 Table Fourteen: Oil sector revenue enhance Nigeria economy

5. Summary 

5.2 Conclusion 

5. 3 Recommendation

Questionnaire 

Reference/ Bibliography 

 

The economy is the backbone of any nation. Nigeria, like other development countries of the world is paying more attention on how to accelerate the rate of development through the various sections of the economy. Oil, a very versatile and flexible non-productive, depleting, natural (hydrocarbon) resource is a fundamental input to modern economic activities providing about 50% of the total energy demanded in the world excluding the former centrally planned economy. Oil exploiting countries of the world depend heavily on oil revenue for foreign exchange earnings and for the government budget, in most cases, reaching 90% or above. Petroleum or crude oil is an oily bituminous liquid, consisting of a mixture of many substances mainly the elements of carbon and hydrogen, and thus known as hydrocarbon. It also contains a very small amount of non-hydrocarbon element, chief amongst which are sulphur, nitrogen, and oxygen. Petroleum industry covers the exploration and production of crude oil as well as petroleum refining, marketing and servicing. Specific policy objectives with respect to petroleum and mining can be summed up us follows. Active government participation in mining 

Operations, diversification of mineral products, the organization and regulation of the development of mineral resource so as to optimize their contribution to the overall national development effort, the conservation of the countries mineral resources, research into efficient extraction methods and wider application and use of mineral manpower development of internal self-sufficiency in the supply and effective distribution of petrol industry products, commercialization of gas and the control of the environmental problems of oil production (Obudun 1987). Though oil did not assume its present significant position in the natural economy until the early 1970s, it is not a novel revelation that it has since become the mainstay of contemporary Nigerian economy. Petroleum either as petrol, diesel, and fuel, oil, lubricant or petro-chemical makes Nigeria’s economy wheel go round. 

Petroleum has transformed poor nations into rich ones desert into watersheds and bankrupt nations into creditors. Specifically, with respect to Nigeria, there is no gain saying that the oil sector has undergone tremendous transformation over the years. (Anyanwa, et al 1997).The industry has emerged from being merely the “supportive” economic sector it was in the 1960’s to the predominant source of foreign exchange and most viable access to international investment opportunities in the 80’s and 90’s,3 no other resources in Nigeria has played such a towering role over the national economy as crude oil. The government of Nigeria has used the revenue derived from oil through tax and royalties to carry out development projects in the country (Iyohu 2000).This study therefore, aims to illustrate clearly the impact of oil industry on economic growth performance in Nigeria. 

The Over dependence on oil has created vulnerability to the vagaries in the progressing section that shows the contribution of oil to some macroeconomic variables. In particular, the lace of oil in the psyche of the average Nigerian oil industry in 2003. The contradiction is more external earning for Nigeria, and also increased tax burden on imported refined petroleum products. Some scholars have advocated for the shifting of emphasis from the oil industry to other sectors owing to their belief in the negative fallouts of the oil industry; some others opined that the sectors should be promoted and developed for its benefits. These opposing views have created the problem of acceptance or otherwise of the oil industry in Nigeria. 

In view of the controversy with respect to the relative contribution of the oil sector compared with other sectors, it is imperative to establish the relative impact of the oil industry in the Nigeria economy. 

The following research question where formulated 

The main objective of the study is  to find out the impact of oil revenue  on the economic growth of Nigeria 

This  study aims at achieving the following specific objectives 

1.6 Scope and Limitations of the Study 

This research work is an investigation into the impact of oil industry on economic growth in Nigeria (2010-2020).In carrying out this research work, the researcher encounter some difficulties. The first of such constraints or difficulties concerns data collection from different sources. Also was the reluctance of some library or Liberians to make data available. Apart from the above mentioned constraints, which are capable of adversely affecting the accuracy of the results of this research work, all other errors and omissions are entirely those of the researcher.

 

Oil revenue (OREV): This is the total amount of income derived from the sales of crude oil/ refined petroleum product annually in the country both internally and internationally, in local currency unit (N).

Growth: is the process of increasing in number or importance of something increase in success of business or economic.

Economic Growth: is an increase in the production of goods and service in economic increase in capital goods, labor force, technology, and human capital.

Revenue: This is the money generated from normal business operation calculate as the average sales price times the number of unit sound.

Tax Avoidance: Is the legal usage of the tax regime in a single territory to one’s owner advantage to reduce the amount of tax that payable by means that are within the law.

Tax Evasion: On the other hand, are the general terms of effort of by individual operation, trust and other entities to evade taxes by illegal means.