<abstract xmlns="http://www.w3.org/1999/xhtml">
<p>The debate for oil-rich economies to plough their oil windfalls into real economic activities to spur diversification has become intense due to the deficit fiscal crisis and poor socio-economic profile of resource-abundant nations. Therefore, we use secondary data from the period between 1981 and 2020 to assess the impact of crude oil revenue on the oil and non-oil sector output performance in Nigeria. The study adopts the ARDL (i.e. autoregressive distributed lag) and the augmented Granger causality techniques to analyse the data. The ARDL regressions show that crude oil positively impacts oil sector performance, but the impact is only substantial in the short run. Crude oil revenue exerts a positive and insignificant effect on the short-run non-oil sector output, whereas, over the long run, it has a negative but significant effect. To propel growth, the study recommends using the excess crude oil earnings to develop non-oil sectors such as agriculture, services, and manufacturing.</p>
</abstract>

The debate for oil-rich economies to plough their oil windfalls into real economic activities to spur diversification has become intense due to the deficit fiscal crisis and poor socio-economic profile of resource-abundant nations. Therefore, we use secondary data from the period between 1981 and 2020 to assess the impact of crude oil revenue on the oil and non-oil sector output performance in Nigeria. The study adopts the ARDL (i.e. autoregressive distributed lag) and the augmented Granger causality techniques to analyse the data. The ARDL regressions show that crude oil positively impacts oil sector performance, but the impact is only substantial in the short run. Crude oil revenue exerts a positive and insignificant effect on the short-run non-oil sector output, whereas, over the long run, it has a negative but significant effect. To propel growth, the study recommends using the excess crude oil earnings to develop non-oil sectors such as agriculture, services, and manufacturing.

Effect of Crude Oil Revenue on the Oil and Non-oil Sectors in Nigeria

Department of Economics, Faculty of Management and Social Sciences

Acta Universitatis Sapientiae, Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

{"article-title":"Effect of Crude Oil Revenue on the Oil and Non-oil Sectors in Nigeria"}

The debate for oil-rich economies to plough their oil windfalls into real economic activities to spur diversification has become intense due to the deficit...

Effect of Crude Oil Revenue on the Oil and Non-oil Sectors in Nigeria

Published Online: Oct 19, 2023

Page range: 138 - 161

DOI: https://doi.org/10.2478/auseb-2023-0007

Keywords
natural resources, diversification, economic growth, economic output, revenue shock

© 2023 Mohammed Bashir Salaudeen, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Effect of Crude Oil Revenue on the Oil and Non-oil Sectors in Nigeria

Published Online: Oct 19, 2023

Page range: 138 - 161

DOI: https://doi.org/10.2478/auseb-2023-0007

Keywordsnatural resources, diversification, economic growth, economic output, revenue shock

© 2023 Mohammed Bashir Salaudeen, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
natural resources, diversification, economic growth, economic output, revenue shock