Assessing the Resource Curse Question: A Case of Crude Oil Production in Nigeria
Year: 2017
Type: article
Abstract: This research attempted to investigate the effects of oil production
on the performance of the Nigerian economy, with a view to either
accepting or rejecting the resource curse hypothesis (which states
that countries with abundance of natural resources, such as crude
oil, tend to grow at a rather sluggish pace compared to their counterparts
with fewer resources). In doing this, time series data spanning
between 1980 and 2015 (which included gross domestic product
[GDP], oil revenue, expenditure on health and education, gross
fixed capital formation, net trade, political instability, corruption,
etc., extracted from World Development Indicators [WDI], Central
Bank of Nigeria [CBN] Statistical Bulletin, and World Governance
Indicators [WGI]; used to proxy economic performance, crude oil
production, human capital development, capital formation/accumulation,
trade openness, and institutional qualities) were assessed.
An econometric approach was applied, with emphasis on the Autoregressive
Distributed Lag (ARDL) Bound Test technique to cointegration
(for its capacity of using variables, their lags as well as the
lags of other variables in the series, endogenously; its general-tospecific
framework and its adequate lag-order selection capacity).
The findings showed that generally, crude oil abundance has positive
effects on the Nigerian economy, however, the resource curse
hypothesis was found to be present, and had been transmitted by
institutional factors such as corruption, weak rule of law, government
ineffectiveness, political instability/violence & terrorism and
so on. It was suggested, amongst other things, that institutions and
institutional quality should be strengthened and conscious efforts
at diversifying the economy should be considered a matter of urgent
importance, if the full benefits of crude oil abundance are to be accessed
Author: Godwin Essang Esu
Language: English
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W2763314085