The crude oil production in Nigeria and the boom or curse implication

Abstract

A reflection on supposed oil exporting states constantly reminds of the invariably of the resources curse hypothesis and environmental consequences of oil exploration. In Africa, especially the case of Nigeria, the argument has remained whether the countrys abundance and voluminous deposit of crude oil has positively affected the livelihood of the people. In view of this, the study examined the impact of crude oil production, square of crude oil production, oil rent and population on the per capita income over the period of 1990-2016. While the study revealed that oil production is an essential ingredient in sustaining a growing income level in the country, the study discovered that a doubled output of the economy's oil production capacity is draw back to economic progress. Thus, the implication of an inverted the U-shape relationship between oil production and income level is that individual well being is adversely affected at a certain level oil output, thus suggesting a potential curse resulting from the countrys natural resources explanation. Furthermore, the countrys oil rent and population explosion especially in the long run exerts a negative and significant impact on the individual income level. Generally, this study significantly presents a relevant policy for the government of Nigeria and other oil exporting and natural resources abundant states. Hence, to achieve the desired objective of the study, there is need to incorporate the square of crude oil production in the model such that relevant inferences are provided from the turning point evidence. Furthermore, the current study revealed important policy guide for Nigeria. The government should intensify the diversification attempt of the country's economy such that the agriculture sector should be reformed and restructured, as this is going to serve as an added value to the GDP of the country. More so, all stakeholders in the oil sectors, and the community leaders especially in the oil producing communities should further engage in inclusive dialogue to foster peace and end the history of militancy, oil bunkering and disruptions across the country. Possibly, the government could begin to consider the liberalization and privatization of the country's oil industry. In the aspect of population, the country's population explosion especially with the relatively lower economic growth posits a serious concern. Thus, there should be a deliberate attempt from the side of the government to carefully inform the populace gains of having a moderate family size. In this case, more awareness should be carried out in addition to the government effort to improve the quality of life of the people through serious cut down of corruption and political crisis in oil region states within Nigeria.

Çalışma, petrol üretiminin ülkede artan gelir düzeyini sürdürmede önemli bir bileşen olduğunu ortaya çıkarırken, çalışma, ekonominin petrol üretim kapasitesinin iki katına çıkmasının ekonomik ilerlemeye geri çekildiğini keşfetti. Bu nedenle, petrol üretimi ve gelir düzeyi arasındaki ters U şeklinde bir ilişkinin iması, bireysel refahın belirli bir düzeyde petrol üretiminde olumsuz etkilenmesi ve böylece ülkenin doğal kaynakları açıklamasından kaynaklanan potansiyel bir laneti akla getirmesidir. Ayrıca, özellikle uzun vadede ülkelerin petrol rantları ve nüfus patlaması, bireysel gelir düzeyi üzerinde olumsuz ve önemli bir etki yaratmaktadır.