Oil Price Volatility and Nigeria’seconomic Growth: A Case for Diversification of Nigerian Economy

Daniel , Rodah, Cookey, Boma Clement

Abstract


The study examined the effects of oil price shocks on growth of Nigerian economy from 1980 to 2017. The study used the vector Auto Regression (VAR) approach to examine how Nigeria’s gross domestic product (GDP) responds to shocks from international oil price. The analysis revealed that oil price shocks, the average, transmitted negative shock to the gross domestic product in Nigeria. The forecast variance decomposition revealed that oil price shocks accounted for about 53% variation in the level of the gross domestic product during the period under reviewed. It was therefore recommended that the government intensity effort at diversifying the energy mix and sources of fiscal revenue to reduce the effect of oil price shocks in Nigerian economy and stimulate sustainable economic growth.


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