An Assessment of the Effect of Federal Government Revenue on Economic Growth in Nigeria: a Disaggregated Approach (1981 – 2018)

Johnson Enakirerhi Evbie
Keywords: Oil Revenue, Non-oil Revenue, Economic Growth, Nigerian Economy
Journal of Inter-Disciplinary Studies on Contemporary Issues 2019 5(1/2), 31-42. Published: June 14, 2022


Abstract

Nigeria is so endowed with abundant natural (oil and non-oil) and all kind of resources. Most of government?s revenue comes from crude oil since its discovery in 1956 and its subsequent internationalization in 1973/74. This paper empirically examined the effect of federal government revenue on economic growth in Nigeria, dissagregrating the revenue into oil and non-oil, covering 1981 – 2018 time series data. The OLS multiple regression estimation technique was adopted to obtain the coefficients. The Augmented Dickey Fuller test (ADF) and Johansen Cointegration test were also conducted. From the findings of the result, all variables, apart from inflation, met the apriori expectations. Both oil and non-oil revenue have positive relationship with economic growth, but non-non-oil Revenue (NOREV) has significant positive effect on economic growth. The model has a good fit with R2 = 0.914434. We therefore recommended, among others, that more efforts should be put into economic diversification on the part of government, away from oil to non-oil, and also to curb corruption and misappropriation of public funds so that the benefits of the revenue so generated can trickle down to the masses and culminate in economic growth and development of Nigeria.