EFFECT OF OIL PRICE FLUCTUATION, CAPITAL FORMATION AND PUBLIC EDUCATION EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA
Abstract
This study examined the effect of oil price fluctuations, capital formation and public education expenditure on economic growth in Nigeria from 1970-2023 Data employed for this study was elicited from World Bank Data Base-World Developmental Indicators of 2022 and Central Bank of Nigeria Statistical Bulletin of 2022. This study employed economic growth (GDP) which is the dependent variable where Oil Price
(OILP), Interest Rate (INT), Exchange rate (EXR), Gros Fixed Capital Formation (GFCF) and Government Expenditure on Education (GEE) are independent variables. This study employed Auto Regressive Distributed Lag (ARDL) Model to analyze data; other diagnostic tests such as: stability test, Auto correlation test, Heteroskedasticity test and BreuschGodfrey Serial Correlation LM test were also carried out and they confirmed the validity and reliability of the model employed. result revealed a significant positive relationship between government expenditure on education and gross fixed capital formation and economic growth in Nigeria over the study period. While interest rate, exchange rate and oil price were found to have a negative but insignificant effect on economic growth in Nigeria. Based on the result,
the study recommended that oil prices are the cause of Nigeria’s volatile growth rate. A combination of strict fiscal policy focused on the actual implementation of developmental strategy, diversification and industrialization might be effective to protect the country’s economy and lead to increasing and consistent economic progress. The study also recommend that the government should improve manpower,
the quality of life of ordinary Nigerians and teacher education should be given desired attention in order to check the falling standard of education in the country.
Government and private sectors should collaborate so as to provide an enabling environment that will enhance capital investments in the economy. Also, gross capital formation should be efficiently channeled with a sizable amount accorded to infrastructural development which in turn translates to economic development. KEYWORDS: Economic Growth, Oil Price Fluctuations, Capital Formation, Public
Education Expenditure and Auto Regressive Distributed Lag (ARDL) Model.
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