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Oil Price Fluctuation and Health Outcomes in an Oil Exporting Country: Evidence from Nigeria

Author

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  • Gabriel Oduyemi

    (Department of Economics, Tai Solarin University of Education, Ijagun, Nigeria,)

  • Taiwo Owoeye

    (Department of Economics, Ekiti State University, Ado-Ekiti, Nigeria.)

Abstract

In oil exporting countries, government finance is heavily dependent on oil revenue and this tends to be highly volatile. This creates instability in output, terms of trade and fiscal balances, and lowers long-run growth rates and ultimately, social spending resulting into poor human development indicators. In Nigeria, indices of human capital development are among the worst globally despite its position as the largest oil producer in Africa. Using time series data from 1980 to 2017, and the Vector Autoregressive Model (VAR) estimates, this paper investigated how fluctuations in oil price affect health outcomes in Nigeria. The main results indicate that oil price shocks are not detrimental to health outcomes. This reinforces the fact that oil price shocks are neither necessary nor sufficient to explain changes that happen in health outcomes in this country. It is the way the government spends its resource windfalls, and the way it adjusts spending during a downturn that is accountable for the poor health outcomes in the Nigerian economy. The study therefore suggests strategic policies that supports ?scal prudence, minimizes macroeconomic distortions and improve health outcomes. This should be backed by adequate institutional capacity.

Suggested Citation

  • Gabriel Oduyemi & Taiwo Owoeye, 2020. "Oil Price Fluctuation and Health Outcomes in an Oil Exporting Country: Evidence from Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 10(4), pages 212-220.
    • Handle: RePEc:eco:journ2:2020-04-26
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    References listed on IDEAS

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    Cited by:

    1. Wang, Yue & Zhang, Zhenke & Xu, Minghui, 2023. "Evolution pattern of African countries' oil trade under the changing in the global oil market," Energy, Elsevier, vol. 284(C).
    2. Valeriy Kozytskyy & Marianna Oliskevych & Galyna Beregova & Nelya Pabyrivska, 2023. "Output and Energy Prices Fluctuations in Response to Market Shocks: System Dynamic Modeling," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 462-466, March.
    3. Oduyemi, Gabriel Olusegun & Owoeye, Taiwo & Adekoya, Oluwasegun Babatunde, 2021. "Health outcomes and the resource curse paradox: The experience of African oil-rich countries," Resources Policy, Elsevier, vol. 73(C).

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    More about this item

    Keywords

    Oil Price; Fluctuation; Health Outcomes; Human Capital.;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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