Structure of Nigerian Federalism, Oil Revenue and Economic Growth

UGWU, James Ike and Okoli, Chukwuma Rowland (2018) Structure of Nigerian Federalism, Oil Revenue and Economic Growth. GOUni Journal of Management and Social Sciences, 4 (1). pp. 128-144. ISSN 2550-7265

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Abstract

There have been divergent views on the impact of earning from natural resources on the economic growth of nations, and how governance impact on the allocation, utilization and dependence on revenue from such resources especially in plural societies. This study set out to determine the impact of oil revenue on Nigeria’s economy taking into account the federal structure of the Nigerian state. We anchored our analysis on the rentier state theory and adopted the ex post facto research design for the study. Secondary data were collected for the period 1981 to 2015 with respect to Nigeria’s oil revenue, gross domestic product (GDP), capital expenditure and external reserve. The study utilized mixed-methods approach of data analysis to subject quantitative data to econometric analysis based on ordinary least square (OLS), while content analysis was adopted to analyze the link between the lopesided federal system and rentier character of the Nigerian state. We found amongst other things that oil revenue has significant positive relationship with GDP and capital expenditure indicating the presence of ‘Dutch Disease’. We found that the imbalance in Nigeria’s federal structure undermines efficient revenue mobilization and allocation, and reinforces rentierism. On the basis of our findings, we conclude that the dependence of the economy on oil revenue would have adverse effect on the economy if there is any drop in oil revenue. We recommended inter alia that Nigerian government should restructure the federal system by granting more political and economic autonomy to the federating units (i.e. the states). More so, the country should embrace diversification of the economy in view of dwindling oil revenue.

Item Type:	Article
Subjects:	H Social Sciences > H Social Sciences (General) L Education > L Education (General)
Divisions:	Faculty of Management and Social Sciences
Depositing User:	GOUNI ICT
Date Deposited:	14 May 2018 10:11
Last Modified:	07 May 2019 09:24
URI:	http://eprints.gouni.edu.ng/id/eprint/62

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