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Determinants of backward linkages of oil and gas industry in the Nigerian economy

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  • Adewuyi, Adeolu O.
  • Ademola Oyejide, T.

Abstract

This paper examines the determinants of backward linkages from the oil and gas industry in Nigeria. Secondary and primary data collected cover firms engaging in fabrication and construction; well-construction and completion, and control systems and ICT. Both descriptive and inferential statistical approaches were employed in the paper. Despite the widespread view that local content in the Nigerian oil industry is very low, there is a clear evidence for the existence of linkages – at least insofar as the three sub-sectors considered in this analysis are concerned. The paper shows that many of the linkages in the Nigerian oil value chain involve local firms, and that this has been a consequence of local content policies and investments in telecommunications and transport. Linkages have been held back by weaknesses in power and water infrastructure. The large investment in higher education in Nigeria suggests that skill-constraints have not been a major obstacle to linkage development in the three sub-sectors. The flow of labour to and from other sectors is indicative of learning spillovers, both within Nigeria and in the West African regional economy. Regression analysis shows that skills, policies, the quality of the national innovation system and their interactions are the major drivers of backward linkages. A number of policy implications to enhance linkage development in Nigeria's oil and gas value chain are identified.

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  • Adewuyi, Adeolu O. & Ademola Oyejide, T., 2012. "Determinants of backward linkages of oil and gas industry in the Nigerian economy," Resources Policy, Elsevier, vol. 37(4), pages 452-460.
    • Handle: RePEc:eee:jrpoli:v:37:y:2012:i:4:p:452-460
    DOI: 10.1016/j.resourpol.2012.06.007
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    References listed on IDEAS

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    7. Macatangay, Rafael Emmanuel “Manny”, 2016. "Optimal local content requirement policies for extractive industries," Resources Policy, Elsevier, vol. 50(C), pages 244-252.
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    16. Mia Ellis & Margaret McMillan, 2018. "Optimal local content for extractive industries: How can policies best create benefits for Tanzania?," WIDER Working Paper Series 133, World Institute for Development Economic Research (UNU-WIDER).
    17. Adewuyi, Adeolu O., 2016. "Determinants of import demand for non-renewable energy (petroleum) products: Empirical evidence from Nigeria," Energy Policy, Elsevier, vol. 95(C), pages 73-93.
    18. Maria Savona & Filippo Bontadini, 2023. "Revisiting the Natural Resource Curse: Backward Linkages for Export Diversification and Structural Economic Transformation," Development and Change, International Institute of Social Studies, vol. 54(2), pages 378-421, March.
    19. Nguyen, Chi-Hai & Ngo, Quang-Thanh & Pham, My-Duyen & Nguyen, Anh-Tuan & Huynh, Ngoc-Chuong, 2021. "Economic linkages, technology transfers, and firm heterogeneity: The case of manufacturing firms in the Southern Key Economic Zone of Vietnam," MPRA Paper 109670, University Library of Munich, Germany.
    20. Jack Pegram & Gioia Falcone & Athanasios Kolios, 2018. "A Review of Job Role Localization in the Oil and Gas Industry," Energies, MDPI, vol. 11(10), pages 1-18, October.
    21. Arena, Marika & Azzone, Giovanni & Dell’Agostino, Laura & Scotti, Francesco, 2022. "Precision policies and local content targets in resource-rich developing countries: The case of the oil and gas sector in Mozambique," Resources Policy, Elsevier, vol. 76(C).
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