Impact of Oil Price Bubble and Economic Growth in Nigeria

Abstract

The study examined the impact of oil price bubble on economic growth in Nigeria for the period of 1990-2020. Secondary data was collected from World development indicators and CBN statistical bulletin. Descriptive statistics, unit root test, co-integration test, granger causality test, variance decomposition and vector autoregressive model were conducted. Findings revealed that oil price bubble does not have significant effect on economic growth in Nigeria. The study recommended that there is need for policymakers to concentrate on policies that will fortify/balance out the macroeconomic structure of Nigeria with specific emphasis on diversification of the national income base as a means of limiting dependence on oil. Also, after an oil shock, appropriate fiscal policy should be utilized to stabilize Nigerian domestic economy and as exporter and importer of oil, the government of Nigeria needs to set up more refineries and ensure that the current ones are in great condition of repair to reduce the importation and bend the accumulations of the instability.

Keywords: Oil Price Bubble, Economic Growth, Nigeria