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Global Academic Journal of Economics and Business
Volume-6 | Issue-06
Original Research Article
Crude Oil Revenue and Real Sector Performance in Nigeria
Kunemoemi, Zacchaeus
Published : Dec. 30, 2024
DOI : https://doi.org/10.36348/gajeb.2024.v06i06.006
Abstract
This study investigates the impact of crude oil revenue on real sector performance (RSP) in Nigeria, employing an ex post facto research design and relying on secondary data from the Central Bank of Nigeria Statistical Bulletin and World Bank Development Indicators. The analysis utilizes the Autoregressive Distributed Lag (ARDL) model to assess the long-run relationship between crude oil revenue (OREV) and key real sector indicators, including oil export (OXP), oil import (OIP), and exchange rate (EXR). Findings from the ARDL long-run regression reveal that crude oil revenue has a significant positive effect on real sector performance, indicating that increases in oil revenue enhance real sector growth. Oil export (OXP) also positively impacts real sector performance, highlighting that revenue generated from exports of crude oil supports sectoral productivity. The effect of oil import (OIP) is likewise positive, signifying that oil imports contribute to real sector development, likely through the provision of essential resources and technology for industrial activities. Conversely, the exchange rate (EXR) effect is positive but statistically insignificant, suggesting a limited role in driving long-term real sector growth. The study’s results underscore the importance of effectively managing crude oil revenue and oil-related trade to enhance the real sector’s performance in Nigeria. The findings recommend policy strategies for encouraging oil revenue and promoting exchange rate stability to foster sustainable economic growth in Nigeria’s real sector.

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