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. 3 NO. 2 2017

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Modelling Diversification of the Nigerian Economy via Non-oil Sector

Achugbu Austin, Monogbe Tunde Gabriel and Ahiakwo Amirize Ukachukwu

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Abstract

The over-reliance of the Nigerian government on oil revenue has jettisoned the expected level of development in the nation and thus paralysed every order sectors in the nation thereby leading to Dutch disease. On this premises, this paper set out to investigate the response of some specific sector of the economy and their contribution to economic growth in Nigeria with emphasis on the agricultural sector, manufacturing sector and mining & quarry sector among others between the periods 1981 to 2015. Study employed granger causality in vector auto regression model where eleven (11) models were formulated. Findings reveal that the lagged value of the agricultural and mining & quarry sector exhibit a significant contribution to the Nigeria economy. The output of these empirics validates the postulation of Rosenstein Rodan (1943) in his well-designed pig push theory. The theory is a concept in development economic which articulate that for the underdeveloped countries to attained a sustainable level of development, large quantum of investment is paramount and that bit-by-bit investment on the preferred sector of the economy will not help in actualising the expected level of growth. On this note, study thus conclude that diversification of the Nigeria economy will be profitable to the nation as the non-oil sector is capable of contributing over 35% of the total generated revenue if key policies are implemented. Based on our findings, study recommends that mangers of the Nigeria economy should embrace the diversification programme and allocate more funds to all order sector of the economy as this will help in stimulating government generated revenue and thus lead to creation of more employment opportunity all over the nation.

keywords:

Economic Diversification, Econometrics Modelling, Economic Development

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