IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 10 NO. 8 2024
DOI: 10.56201/ijebm.v10.no8Sept.2024.pg1.11

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Trend Analysis of Fiscal Policy and Oil Price Shocks on Sectoral Output Growth in Nigeria

Arulogun, O. O, Aruwaji, M. A, and Adekeye E.S

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Abstract

Nigeria's dependence on oil production as its primary income source has significant economic consequences. Agriculture was neglected in favour of oil, which became the country's main revenue stream and was anticipated to drive substantial economic growth and prosperity. However, there have been sequences of oil price changes over the last four decades, which has impeded Nigeria's macroeconomic objectives. This study looked at the trend analysis of fiscal policy and oil price shocks on sectoral output growth in Nigeria. This study relied on secondary data. The data were sourced from Central Bank of Nigeria (CBN) Statistical Bulletin, National Bureau of Statistics (NBS), World Economic and Financial Surveys for the period of 1981 and 2018 and trend analysis test was used to analyze the data collected. The results for agricultural sector showed that there were large random fluctuations in all the outputs except foreign exchange rate that does not appears stationary from year 2006 up till 2016.The results for industrial sector discovered that there were no sharp fluctuations in the external debt and foreign exchange rate, though above the oil shocks in value. External debt has the highest value followed by external reserves, industrial output, government revenue, government expenditure, foreign exchange rate and lastly oil shocks. The fluctuations of all the variables are inversely related to the value. Trade and services sector experienced a serious crash between late 2014 and 2017. The output fluctuated greatly and dropped greatly most especially for oil shocks till late 2018. This observation could be traced to the heavy dependent on oil sector in Nigeria. The study recommends that government should consider maximizing its revenue potential by broadening its revenue base through an effective and efficient taxation system, stabilizing exchange rates, and fostering an environment conducive to the growth of industrial sectors, th

keywords:

Fiscal policy, oil price shocks, sectoral output, trade and services, trend analysis,

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