OIL PRICE VOLATILITY AND ECONOMIC GROWTH IN NIGERIA; 1990-2024
Abstract
This study examines the effect of oil price volatility on economic growth in Nigeria from 1990 to 2024 using an ex post facto research design. Secondary data were sourced from the Central Bank of Nigeria's Statistical Bulletin, World Bank Development Indicators, and British Petroleum Statistical Review of World Energy. The research employed descriptive statistics, correlation analysis, and the Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model to estimate oil price volatility, followed by multiple regression analysis to examine relationships between variables. The study revealed that degree of openness significantly enhances economic growth, while foreign exchange rate growth, inflation rate growth and oil price volatility negatively impact economic performance. The study concludes that trade liberalization promotes growth, while macroeconomic instability through exchange rate depreciation and inflation poses significant challenges. The study recommended that government should enhance trade liberalization policies, the Central Bank of Nigeria should implement robust exchange rate management, and monetary authorities should prioritize inflation targeting to achieve sustainable economic growth in Nigeria's oil-dependent economy.
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