ABSTRACT

This study aims at investigating the impact of crude oil price on the economy of Nigeria over the period 198I-2015. The effects of variables such as external reserves, exchange rate, consumer price index (CPI) on economic growth have been studied as well. The data used was secondary data obtained from the statistical bulletin of Central Bank of Nigeria (CBN). The study uses multiple regression to establish the relationship between the variables, unit root test was used to ascertain if the variables are stationary or not and correlation analysis were adopted to determine the degree of the relationship between the variables used. The results therefore, revealed that crude oil price and other explanatory variables has significant and positive effect on GDP, though External Reserves is insignificant and Consumer P0rice Index which is proxied by inflation rate has significant but negative impact on economic growth in Nigeria, which means that except Inflation rate, other variables have the potential of increasing GDP as they increase. The study therefore recommends that government should initiate policies that will diversify the income stream of Nigeria’s economy instead of depending mainly on crude oil as source of revenue, and should ensure low and stable prices as high inflation rates decreases the growth of the Nigerian economy.