The Influence of Oil Price Uncertainty on Economic Activities in Nigeria

Authors

  • Samson Ogege University of Lagos
  • Tarila Boloupremo University of Africa, Toru-Orua

DOI:

https://doi.org/10.5195/emaj.2020.195

Keywords:

Crude Oil Price, Economic Development, Human Development, Life Expectancy, Performance Indicators

Abstract

This paper seeks to appraise the uncertainty of oil price influence on the activities of Nigerian economy with regard to human development in Nigeria. The research utilized the annual time series data spanning between 1981-2018, and the stationarity of the observed variables was tested by carrying out a unit root test and the stationarity of most of the observed variables were revealed at first difference. The secondary data employed were analyzed with the aid of least square technique of data analysis to assess the association between the observed variables. In response to the outcomes of the analysis, it was revealed that crude oil price positively and insignificantly influences life expectancy, but significantly influences consumption per capital and contrarily, it revealed negative and insignificant influence on physical quality of life and education index. It was inferred by the study that, there is existence of a comparative association of oil price with the indicators of Nigerian economic development. However, there is divergence of influence of the mechanisms of economic attributes as well as performance indicators. The study recommends that, a strict measure of monetary policy should be adopted by the government to regulate the rates of interest and inflation in the economy on a regular basis.

Author Biographies

Samson Ogege, University of Lagos

Department of Finance

Tarila Boloupremo, University of Africa, Toru-Orua

Department of Banking and Finance

References

Abebe, H., Russell, S. and Xibin, Z. (2019). Oil prices and economic policy uncertainty: Evidence from a nonparametric panel data model. Energy Economics, Vol. 83, 40-51.

Adeleke, O., Harol, N. and Adebayo, K. (2019). Crude oil price shocks and macroeconomic performance in Africa’s oil-producing countries. Journal of Corgent Economics and Finance, Vol. 3, Issue: 1.

Alley, I., Asekomeh, A., Mobolaji, H., and Adeniran, Y. (2014). Oil price shocks and Nigerian economic growth. European Scientific Journal, 10(19), 375-391.

Armando, F.D. (2009), Latin American Structuralism and Economic Theory, CEPAL Review No. 98, 175-195.

Baumeister, C. and L. Kilian (2015). Understanding the decline in the price of oil since June 2014. Journal of the Association of Environmental and Resource Economists, Vol. 3, No:1, 131−158.

Charles, Felicia, Jonathan, Okoro, Aja and Kenneth (2019). Oil Price Fluctuation, Oil Revenue and Well-Being an Nigeria. International Journal of Energy Economics and Policy, 9(1), 346-355.

Demirbas, A., Al-Sasi, B. O., Nizami, A.S. (2017). Recent volatility in the price of crude oil. Energy Sources, Part B: Economics, Planning and Policy, 12(5), 408–414.

Elder, J. and Serletis, A. (2010). Oil price uncertainty. Journal of Money Credit and Banking, 42(6), 1137-1159.

Fischer, S. (1985), Supply Shock, Wage Stickiness and Accommodation, Journal of Money, Credit, and Banking, 17: 1-15.

Ishmael, O., Matthew, T. R. and Park, I. (2017). The Impact of Changes in Crude Oil Prices on Economic Growth in Nigeria. Journal of Economics and Sustainable Development, Vol.8, No:12.

Junior, T. C. and Goodness, C. A. (2018).The effects of oil price uncertainty on economic activities in South Africa. Journal of Cogent Economics & Finance, Vol. 6, Issue: 1.

Mankiw, N. G. (1995). The growth of nations", Brookings Paper on Economic Activity, pp. 275-326.

Mhamad, S.H. and Saeed, S.T. (2016). Impact of Oil Price on Economic Growth: Empirical Evidence from Iraq. Journal of Economics and Sustainable Development. Vol.7, No.14, 2016.

Munaf, M., Sundus, J. S. and Shatha, S. D. (2018). Impact of Oil Price Fluctuations on Human Development: A Standard Study of Iraq.

Offiong, A.I., Atsu, I.A., Ajaude, E. &Ibor, B.I. (2016). The Impact of Oil Price Shocks on the Economic Growth and Development of Cross River State, Nigeria. International Journal of Financial Research, Vol. 7, No. 4.

Ogwumike, F. O and Ogunleye, E. K. 2008. Resource-led development: an illustrative example from Nigeria. [Online]. Available at http://onlinelibrary.wiley.com/doi/10.1111/j.1467-8268.2008.00182.x/full

Sommer, M. (2002), Supply Shocks and Persistence of Inflation, retrieved on March 31, 2014, http://econ.jhu.edu/wp-content/uploads/pdf/papers/WP485SommerInflation_12-02.pdf

Umar, M. G., Aliyu, I. B. and Ahmad, M. (2017). Oil Price Fluctuations and Economic Growth in Nigeria. Australian Journal of Social Science, Vol. 3, pp. 1-16.

Downloads

Published

2021-04-27

Issue

Section

Articles