Examining the Impact of Oil Revenue, Public Debt, Insecurity, External Reserves on Nigeria’s Economic Growth

Abstract

The Nigerian economy has relied heavily on oil over the years, and within this sector, certain forms of insecurity such as militancy activities have emerged. Additionally, other forms of insecurity are spread across the regions of the country which has invariably affected the revenue of the government. This has led to increased borrowing and gradually recording depleting of the nation’s reserve. These challenges created the need to examine the impact of oil revenue, public debt, insecurity and external reserve on Nigeria’s economic growth. Using time series data from 1990 to 2023 and employing econometric techniques such as Autoregressive Distributive Lag (ARDL) model and Granger causality test. The study reveals that in the short run, oil revenue has positively affected GDP whereas insecurity, public debt and external reserves negatively affect GDP, and are all statistically significant. Further findings show that in the long run, all the variables maintained same sign as obtained in the short run but are statistically insignificant. Additionally, oil revenue, insecurity and public debt exhibits a uni-directional relationship with GDP. Consequently, the study recommends need for diversified economic strategies and prudent debt management to foster sustainable economic growth.