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Natural Resource Extraction and Economic Performance of the Niger Delta Region in Nigeria

Author

Listed:
  • Susan Amiesa Fubara

    (Emerald Energy Institute for Petroleum and Energy Economics, Policy and Strategic Studies, University of Port Harcourt, Nigeria,)

  • Omowumi O. Iledare

    (Emerald Energy Institute for Petroleum and Energy Economics, Policy and Strategic Studies, University of Port Harcourt, Nigeria,)

  • Obindah Gershon

    (Department of Economics and Development Studies, Covenant University, Ota, Ogun State, Nigeria)

  • Jeremiah Ejemeyovwi

    (Department of Economics and Development Studies, Covenant University, Ota, Ogun State, Nigeria)

Abstract

The effect of natural resource extraction on regional and sub-national economic growth has only recently started to generate discussions in energy and regional economics literatures. This paper investigates this issue for the oil producing (Niger Delta) region in Nigeria using a panel data modelling framework. Empirical results from the analysis show no significant relationship between direct extractive activities on the internally generated revenue of each state. However, there is strong statistical evidence that show extractive activities impact positively on the total state level revenue - in the form of production-based derivation fund that accrues to oil producing states. In addition, the extractive activities positively and significantly affect each state s gross domestic product and its disaggregated industries (petroleum and services). However, the impact of the natural resource extraction on the non-oil industry (manufacturing) is negative and not statistically significant. So, the results obtained renders inconclusive, the argument of a possible existence of the resource curse at the subnational level in Nigeria. Conclusively, natural resource extraction has positive significant impact on the economic performance of states in the oil-producing region, in contrast to the negative impact at the national level. The results bring to the fore, the need for diversification away from oil to other sectors especially in within petroleum resource-rich regions/states of the Nigeria. The outcome of the study further highlights another policy issue of better managing oil-resource revenues towards achieving national economic goals including SDGs.

Suggested Citation

  • Susan Amiesa Fubara & Omowumi O. Iledare & Obindah Gershon & Jeremiah Ejemeyovwi, 2019. "Natural Resource Extraction and Economic Performance of the Niger Delta Region in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 9(4), pages 188-193.
    • Handle: RePEc:eco:journ2:2019-04-24
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    Cited by:

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    2. Yu, Haijing & Hu, Chenpei & Xu, Bing, 2022. "Re-examining the existence of a “resource curse”: A spatial heterogeneity perspective," Journal of Business Research, Elsevier, vol. 139(C), pages 1004-1011.
    3. Oseghale Baryl Ihayere & Philip Olasupo Alege & Obindah Gershon & Jeremiah Ogaga Ejemeyovwi & Praise Daramola, 2021. "Information Communication Technology Access and Use towards Energy Consumption in Selected Sub Saharan Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 471-477.
    4. Vellayati Hajad, 2021. "The Dilemma of Natural Resources: Economic Opportunities and Challenges Post-Conflict," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 426-432.
    5. Chala Amante Abate & Dagim Tadesse Bekele & Belisty Bekalu Ayenew & Adisu Abebaw Degu, 2023. "The Relationship Between Natural Resource Rent and Economic Growth in Nigeria," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 13(4), pages 3-25.

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    More about this item

    Keywords

    Crude Oil Extraction; Economic Performance; Niger Delta; Panel Data; Regression Modelling; Nigeria;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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