Dependence on oil: What do statistics from Nigeria show?

Many economists have raised cogent concerns regarding the economic stability of Nigeria, given the volatility and in recent times, the decline in oil prices. Since the discovery of crude oil in commercial quantity in Nigeria in 1956 and the attendant oil boom in the 1970s, oil has been the thought and the talk of the country chiefly because of its associated quick and huge returns. The nation by way of dependence on this black gold has experienced rapid economic growth though in an inconsistent manner: this can be attributed to the volatility in the price of the crude oil upon which the country leans. This paper shows how volatility in oil prices engenders inconsistency in economic growth vis-à- vis oil production and oil exports. Secondary data from 1993 to 2015 and descriptive tools were used to assess this and it was found that there exists a positive correlation between oil dependency and inconsistency in economic growth in Nigeria. Growth was attained as a result of high world oil prices; however, due to volatility in oil prices and failure of the country to industrialise and diversify the economy from its monocultural nature, such growth tends to be volatile. It was, therefore, recommended that a forceful and pragmatic diversification, chiefly towards the manufacturing sector, is the key to an increased and a sustainable economic growth.