Vitalis N. Ewereoke


The study assesses the oil bench-marking fiscal rule so as to determine its impact on Federal Government Revenue in Nigeria using econometric model with ordinary least square (OLS) techniques. The study test for the order of integration of the variables that is the stationarity of the variables using Augmented Dickey Fuller (ADF) Test for stationary and Philips-Peron unit root test. The results revealed absence of serial correlation and all variables incorporated in the model were non-stationary at their levels. Chow test was applied in testing the three hypotheses formulated. The result revealed the rejection of the null hypotheses and hence the acceptance of the alternate hypotheses. In otherwise the Nigerian economy had been decoupled or delinked from the oil revenue volatility. In an attempt to establish short run and long run relationships between real government expenditure and real oil revenue. Error correction mechanism was applied. The result also reveals reduction in the percentage of the discrepancy between short-term and long term real government expenditure that is corrected within a year from 76% to 58%. Indicating the effectiveness of the Nigeria-oil-price based fiscal rule. In other words, Oil bench marking fiscal policy has impacted significantly on revenue from the oil sector. In addition, it also has a significant effect on federal Government capital expenditure. The policy also impacted significantly on Nigeria external reserves. However the following factors were also identified as contributing to Nigerian volatility challenge. Oil driven nature of the economy, small size of the economy and the degree of global integration. Discovered also were corruption and high degree of openness. We therefore recommended among other things the continued adoption of the Nigerian oil price based fiscal rule, (oil bench marking) addressing the issue of corruption and transparency, more sustained reform in the area of diversification of the economy.


Oil Bench Mark, Federal Government Revenue, Fiscal Policy and Economy

Full Text:



Akinlo A.E (2012) How Important is Oil in Nigeria Economic Growth? Journal of sustainable Development, VOL 5, No 4 April

Anyanwu J.C (1997) The structure of Nigeria Economy. Joanee Educational Published Ltd, Onitsha.

Allier, Max and martin Kaufman (1999) “Non Renewable Resources. A Case For Persistent Fiscal Surpluses’ IMF Working payer 99/44 (Washington; International Monetary Fund)

Al-moneef (2006) The Contribution Of The Oil Sector To Arab Economic Development OFL pamphlet series 34 Vienna Austria

Ariyo A (1996) “Economic Reform and Macroeconomic Management in Nigeria Ibadan; Ibadan university press LTD

Azuka, E.B 2011, Research Methods, Theory and Application , Onitsha, Noben Publisher

Barnet, Steven and Rolando Ossowski (2012) “Operational Aspects Of Fiscal Policy In Oil Producing Countries” IMF working paper. 02/177(Washington: International Monetary Fund)

Baunsgard T (2013) “Fiscal Policy Rule in Nigeria: Any Roles for Rules?” “IMF working paper B/155(Washington: international Monetary Fund.

Boye, F (2011) Oil Revenue And Macroeconomic Volatility In Norway!! OPEC Energy Review

Brunsehwater C.N (2008) “Cursing and Blessing? Natural Resource Abundance, Institutions and economic Growth” World Development 36, 399-419. Hltpi//dx- doi, org/10 1016/j Worlddev, 2007.03,004

Central Bank of Nigeria Statistical Bulleting (2010) Anural Report And Statement of Account

Chalk, Nigel, (1998) “Fiscal Sustainability With Non-Renewable Resources “IMF working payer 98/26(Washington: International Monetary Fund)

Chukwudire (1995) Introduction to Public Finance, A didactic Approach Adsod educational publisher Onitsha.

Corden P. , Neary J.P (1982) “Booming sector and de-industrialization In A Small Open Economy: The Economic Journal , 92,825-848. http;/dx.dol-org/10.2307/2232670.

Drazen, Allam (2000) Political Economy In Macroeconomics Princeton University press protection

Eden V.H, Emery D and Khemani P (2012) “Developing Legal Frameworks To Promote Fiscal Responsibility –Design matters.

Drazen, Allen (2002) “Fiscal Rules From A Political Economy Perspective paper presented at the conference on rules based fiscal policy in emerging market economics Oaxaca, Mexico February 14-16

Emma I.O (2014) “Transformational Leadership: Key To The Developmental Challenges Of Transiting Economics” Being a paper presented at the 2014 Annual conference of federal polytechnic, Oko.

Esfahani H.S Mohaddes, IC, and pesarum M.H (2009) Oil Exports And The Iranian Economy 12A discussion paper 4537.

Gujarati D.N and Sangulta (2007) “Basic Econometrics, New Dc (Hi, Macgraw Hill)

Gujarati N.G, and porter D.C (2009) “Basic Econometrics New York, Mcgraw Hill Inc. international edition.

Gylfasion, T. (2001) Natural Resources, education and economic Development. European, Economic Revenue, 45, 887 – 859 http://dx.dos. 025/10.1111/1467-9455.00215

IMF (2013) World Economic Outlook “

Kof Swiss economic Institute ( 2012) “Globalization Index; Zurich, Switzerland, www.kof.

Kopits G and symansky S (1998) Fiscal Rules IMF Accounts Paper 162

Mehnara M, karsalari AR, and Haghiri, F (2012) OIL Fund And The Instability Of Macro Economy In Oil-Rich Counties world applied sciences journals 16(3):331-336

Mody A (2004) What Is An Emerging Market IMF working payer WP/04/177

Nigeria federal ministry of finance( 2010) Medium-Term Expenditure Framework And Fiscal Strategy paper 2011-2013. Federal budget office of the Nigeria federation.

Nigeria national assembly (2007) Fiscal Responsibility Act, 2007, ‘2007 Act No 31 19th July.

Nwankwo A.E (2015) “Oil price crash and Nigeria: why this time is different. Nigeria ministry of finance, budget office.

Obadam M (2008), Economic Globalization, Markets And National Development How sensible do the poor countries (Nigeria included)stand “98th Inaugural lecture series university of Benin, Nigeria.

Obinna O.E. (1985) Public Finance, Nsukka AP and P press Ltd.

Odulani G.O. (2007) Crude Oil And The Nigeria Economic Performance department of economics and development studies college of Business and social science covenant University, Ogun State, Nigeria.

Okoro A.S. (2013) Government Spending And Economic Growth In Nigeria Global Journal Inc. U.S.A.

Olanuyam, Olaramwagu (2000) The Effects Of Economic Instability On Aggregate Investment In Nigeria. The Nigeria journal of economic and social studies Vol. 42, No1, Pg 23-36.

Onyegu U.B. (2004) Elements of Public finance Abbit books Ltd Onitsha

Pham T (2009) Government Expenditure And Economic Growth: evidence from Singapor, Hongkong and Malaysia” Erasmus university Rotterdam 2008/2009

Rosser A (2006) The Political Economy of the Resources Curse a literature survey IRS working paper 268

Schmidt –Hebbel K (2012) Fiscal Institution In Resource Rich Economics Lessons From Chile And Norway, Catholic University of Chile

World Bank (2003) Nigeria Policy Options For Growth And Stability Report No 26215NGA, Washington: D.C the World Bank

World Bank (2013) country Listing 2013


  • There are currently no refbacks.

ISSN (Print): 2276-8645


Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.