Oil Revenue and Real Sector Performance in the Nigerian Economy
Keywords:agricultural sector, manufacturing sector, real sector performance, oil revenue
The real sector of the economy especially agriculture and manufacturing, have suffered serious neglect due to growing influence of oil sector performance. This paper analyzed the relationship between oil revenue and real sector performance in Nigeria between 1980 and 2021. Agricultural and manufacturing sectors’ outputs were used as proxy of real sector performance, while oil revenue is the independent variable with, exchange rate and inflation as control variables. Data were collected from CBN publications. The ADF unit roots results showed that the data in agriculture and manufacturing sectors model were integrated at different order (i.e., I(0) and I(1)), but none was I(2) and the variables were co-integrated using the Bound Testing Co-integration techniques. Autoregressive Distributed Lag (ARDL) was used to estimate the agricultural and manufacturing sector models. The outcome revealed that the relationship between oil revenue and agriculture sector output is positive and statistically not significant in the long-run. There is also a positive connection between oil revenue and manufacturing sector performance in terms of output. The coefficients of the current and lag periods of the dependent variables were seen in the dynamic model to be insignificant, suggesting that oil revenue have not affected manufacturing sector in the immediate period. The study recommends among others, that, the government should pay serious notice to the agricultural and manufacturing sectors as they constitute the real sectors of the Nigerian economy, by increasing the level of investments and opening them up to both domestic and foreign investors in addressing the macroeconomic objectives of the nation.
How to Cite
Copyright (c) 2023 Author(s)
This work is licensed under a Creative Commons Attribution 4.0 International License.