Effects of oil export revenue on economic growth in Nigeria: A time varying analysis of resource curse

Abstract

Abstract This paper examines the effects of oil revenue on economic growth by adopting the Bayesian time-varying parameter (TVP) model to further verify the resource curse hypothesis in Nigeria. The result provides new insights into the oil curse phenomenon in Nigeria. Therefore, using annual data from 1970 to 2015, oil revenue export is found to positively and significantly contribute to economic growth throughout the period of study. Empirically, Nigeria s economy is found to be a resource dependent economy. It is further found that unfavourable openness and low educational quality are possible transmission channels of slow growth experienced in Nigeria despite the receipt of huge oil revenue over the sample period. Channeling oil export revenue to more human capital development and tradable sectors are important for growth in the sample country. Finally, formulation, implementation and commitment to sound educational and trade policies are proposed recommendations for inclusive growth in Nigeria.