Petroleum Resource, institutions and economic growth in Nigeria
Empirically, the importance of natural resource abundance on economic growth in natural-resource-rich countries has not been in doubt. In this paper, we investigate this role in the context of petroleum resource abundance, institutional quality and economic growth in Nigeria. Share of oil exports to GDP as a measure of petroleum resource abundance and institutional quality were examined using time series data and error correction econometric technique. Findings show that petroleum sector in Nigeria need to be encouraged to play the leading role in the economic growth and development process by improving on the performance of institutions through less corrupt activities, effective governance and sound contract enforcement in order to have a sizeable positive effect on economic growth. Macroeconomic indicators like openness and inflation play crucial role to ensure regular and significant impact of petroleum resources on economic growth in Nigeria. The paper concluded that, an abundance of petroleum resources may in fact be much less of a curse and more of a boom for economic performance than often believed if quality institutions are in place. The petroleum sector remains very strategic to the sustenance of rapid economic growth and development in Nigeria.
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