Oil And Non-Oil Share Prices Dynamics: Effects On Economic Growth In Nigeria (1980-2018)
NWAKO Keania Gbenedum
Department of Economics, Faculty of Social Science, Rivers State University, PH
OKIDIM I A
Department of Agric. & Applied Economics, Rivers State University, PH
TUANEH Godwin Lebari
Department of Agric. & Applied Economics, Rivers State University, PH
OKUDUWOR A A
Department of Agric. & Applied Economics, Rivers State University, PH
Keywords: Oil Price, Non-Oil Price, Economic Growth, Autoregressive Distributed Lagged Model (ARLD), Shocks
Abstract
This research paper investigated the effects of oil and non-oil share price dynamics on economic growth in Nigeria for the period 1980 to 2018. The research utilized secondary data which was sourced from the CBN statistical bulletin and the Nigeria Stock Exchange shares price list published on their website. Data for the study comprised of those on oil and non-oil sectors stock market prices; and the growth rate of gross domestic product at constant basic prices. The Autoregressive Distributed Lag (ARDL) and Error Correction Model (ECM) methods of analysis were adopted using Eviews 11.0. The results of the data analysis showed that long-run co-integration exists among the variables. The result also showed that in the short run, economic growth in Nigeria is not significantly affected by share price dynamics in both the oil and non-oil sectors. The model has an ECM coefficient of -1.098 which implies that the model can converge to long-run equilibrium at a speed of 109.8%. From the above, it was concluded that both oil share price dynamics and non-oil share price dynamics had no significant effect on Nigeria’s economic growth. On the other hand, oil share price dynamics and non-oil share price dynamics did not have significant Causal effect on the economy. The study thus recommended that policymakers should channel the high receipts from the export of crude to productive investments through financial institutions that will allocate the resources more efficiently to improve the quality of investment capable of driving economic growth.