An Empirical Analysis of Oil Revenue, Non-Oil Revenue and Economic Development in Nigeria (1980-2015)

This paper empirically examined the relationships among oil revenue, non-oil revenue and economic development in Nigeria over the period from 1980 to 2015 employing time series data, Augumented Dickey Fuller test, Phillip-Perron test, Johansen Cointegration test and Ordinary Least Square estimating technique (OLS).Findings from the analysis revealed that oil revenue has a statistically significant positive relationship with economic development in Nigeria which is in conformity with apriori theoretical expectation.The results further revealed that a one naira increase in oil revenue would bring about 3.94 units rise in economic development proxied by real gross domestic product.The results also show that there exists a statistically significant positive relationship between non-oil revenue and economic development.A one naira increase in non-oil revenue would bring about 14.51 units rise in economic development.Based on the results, government at all levels should invest massively in both the oil and non-oil sectors of the economy in order to boost nationally generated revenue for economic development; credible people should be elected into political offices by Nigerians who would make judicious utilization of the oil revenue and non-oil revenue for the improvement of the living standard of the people and overall development of the country; domestic and foreign investors should be encouraged by the government to invest in the oil and non-oil sectors through provision of basic infrastructural facilities like uninterrupted power supply, good road network, efficient and effective communication system and regular supply of drinkable water; and loanable funds at reduced interest rates should be made available to domestic investors in the non-oil sector of the Nigerian economy especially the agricultural and manufacturing sub-sectors.In addition, existing refineries in the country should be well maintained to produce at full capacity and new ones be established to produce refined petroleum products that can be exported to foreign countries which would boost the nationally generated revenue for economic development; and incentives for ease of doing business should be provided for both domestic and foreign investors in the oil and non-oil sectors of the economy inform of favorable fiscal policy.