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Oil Revenue, Public Spending and Economic Growth Relationships in Nigeria

Author

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  • Omo Aregbeyen
  • Bashir Kolawole

Abstract

This study examined the relationships among oil revenue, government spending, and economic growth in Nigeria. By implication, it investigated whether oil revenue impacted on government spending, as well as on economic growth in the country over the period from 1980 to 2012. Time series data were analyzed using econometric techniques which included Ordinary Least Square (OLS), cointegration, Vector Error Correction Model (VECM), and Granger causality to determine the direction of causality and the magnitude of impacts of the variables. Findings from the analysis revealed that oil revenue Granger caused both of total government spending and growth, while there was no-causality between government spending and growth in the country. The study therefore suggested that government should increase spending on capital projects as well as intensify efforts at increasing output in the oil sub-sector in order to boost economic growth in Nigeria.

Suggested Citation

  • Omo Aregbeyen & Bashir Kolawole, 2015. "Oil Revenue, Public Spending and Economic Growth Relationships in Nigeria," Journal of Sustainable Development, Canadian Center of Science and Education, vol. 8(3), pages 113-113, April.
    • Handle: RePEc:ibn:jsd123:v:8:y:2015:i:3:p:113
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    References listed on IDEAS

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    Cited by:

    1. Zakayo G.N. IMBOGO & Nelson H.W. WAWIRE, 2019. "Analysis of the relationship between expenditure on oil imports and public spending on selected social services in Kenya," Journal of Economics Library, EconSciences Journals, vol. 6(3), pages 201-224, September.
    2. T.A Abari-Ogunsona & R.A Danmola & M.S Aruleba, 2025. "Oil Revenue Fluctuation, Fiscal Policy Response and Economic Growth in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(9), pages 3037-3047, September.

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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