DOWNSTREAM PETROLEUM SECTOR DEREGULATION AND ECONOMIC DEVELOPMENT OF NIGERIA [2004-2019]

Muhammad Sani Yakubu; Sani Aliyu Abubakar; Falilat Idowu & Shafi’u Muhammad Isyaku

Abstract

This study investigated the effect of downstream deregulation of the petroleum sector on the economic development of Nigeria from 2004-2019. Ordinary Least Square (OLS) method and regression equations were employed. Unit root test was done using Augmented Dickey Fuller technique (ADF), while cointegration was done using the Johansen test. Vector error cointegration method (VECM) was used to determine both the long and short run term causality between the study variables. The study found the presence of cointegration among the study variables. However, there was no long or short run term causality between oil revenue and development indicators such as education, health, and agriculture. Hence a conclusion that downstream deregulation of the petroleum sector has not yet promoted economic development in Nigeria. The study recommends that corruption, smuggling of petroleum products and inappropriate pricing of oil products be addressed through accountability, capacity building of the police/ judiciary departments through increase of budget and technical means