Acta Univ. Bohem. Merid. 2018, 21(1):1-22 | DOI: 10.1515/acta-2018-0001804

The Influence of Oil Price Volatility on Selected Macroeconomic Variables in Nigeria

David Umoru1, Sylvester Ohiomu1, Richard Akpeke
1 Department Of Economics, Edo University, Iyamho, Edo State, Nigeria

Keywords: Exchange Rate Variability, External Reserve, Oil Price Volatility, Real GDP, VAR

The paper analyses the influence of oil price volatility on Exchange Rate Variability, External Reserves, Government Expenditure and real Gross Domestic Product using the methodology of Vector Auto-Regressive (VAR) to carry out regression analysis, impulse response function and factor error variance decomposition for robust policy recommendations. The results of the research show that unstable oil price exerts varying degrees of deleterious effect on exchange rate variability, external reserves, Government expenditure and real gross domestic product (GDP). Based on the findings of the study, we recommend the need for the country to branch out its revenue sources. This will further shield the dangle effect of the fluctuation in prices of oil. Serious policy attention should be attached to agricultural reformation, industrial policy drives, mines and mineral development to diversify Nigeria's economy following the downward slide in the oscillations in oil prices to address the problem of excessive dependence on crude oil exportation. This will help to achieve sustainable growth and development in Nigeria.

JEL classification: C32, E27, E71

Published: July 28, 2020  Show citation

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Umoru, D., Ohiomu, S., & Akpeke, R. (2018). The Influence of Oil Price Volatility on Selected Macroeconomic Variables in Nigeria. Acta Universitatis Bohemiae Meridionalis, 21(1), 1-22. doi: 10.1515/acta-2018-0001
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