Effect of Crude Oil Price and Production on Nigeria Economic Growth (1974-2023)

Abstract

This research analyzes the influence of Crude Oil Price (COP), Crude Oil Price Volatility (COPV), and Crude Oil Production (COPN) on Nigerian economic performance through their impact on Real Gross Domestic Product (RGDP) and Gross National Product (GNP). The study utilizes Foreign Direct Investment (FDI) as a control variable. Using the Autoregressive Distributed Lag (ARDL) Bounds Test for Cointegration and the Error Correction Model (ECM), the study finds that crude oil price has the strongest positive relationship with Nigeria’s economic growth. Crude oil production shows minimal effects, while price volatility has a weak impact. The findings highlight Nigeria’s dependence on crude oil price changes and emphasize the need for economic diversification and better investment policies.