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Global Jou nal o Resea ch in Educa ion & Li e a u e
ISSN: 2583-2662 (Online)
Volume 05 | Issue 05 | Sep .-Oc . | 2025
Jou nal homepage: h ps://gj publica ion.com/gj el/
Resea ch A icle
Analy ical Re iew on Theo ies o Economic G ow h in a Socie y
*Ekwuye, B.M.
Depa men o Finance and Ope a ions Uni , Ch is ian Aid Uni ed Kingdom/DRC 034 Bougain illea, Goma, No d Ki u
Democ a ic Republic o Congo
In oduc ion
Economic g ow h e e s o an inc ease in he size o a coun y's economy o e a pe iod o ime. The size o an economy
is ypically measu ed by he o al p oduc ion o goods and se ices in he economy, which is called g oss domes ic
p oduc (GDP). I a gues ha eal g oss domes ic p oduc (GDP) pe pe son will pe pe ually inc ease because o people's
pu sui o p o i s (Libe o,2024). G ow h heo y explains how economies g ow o e ime. I encompasses a ious
models, including neoclassical and new g ow h heo ies, and ocuses on ac o s like echnology, human capi al, and
inno a ion.
The heo y helps economis s unde s and and p edic how much an economy will g ow, ypically measu ed by changes in
GDP o o he na ional income agg ega es (Libe o,2024). The key poin s o economic g ow h a e ha g ow h heo y
p esumes he desi e and wan s o he populace will d i e ongoing p oduc i i y and economic g ow h, a cen al ene o
new g ow h heo y is ha compe i ion squeezes p o i , o cing people o cons an ly seek be e ways o do hings o
in en new p oduc s in o de o maximize p o i abili y, he heo y emphasizes he impo ance o en ep eneu ship,
knowledge, inno a ion, and echnology, ejec ing he popula iew ha economic g ow h is de e mined by ex e nal,
uncon ollable o ces and knowledge is ea ed as an asse o g ow h ha is no subjec o ini e es ic ions o
diminishing e u ns like o he asse s such as capi al o eal es a e.
Economic g ow h is ypically measu ed by changes in GDP, which ep esen s he o al alue o goods and se ices
p oduced in an economy o e a speci ic pe iod. O he measu es, such as G oss Na ional P oduc (GNP) o pe capi a
income, can also be used o assess economic g ow h. he e o e, g ow h heo y p o ides a amewo k o unde s anding
he d i e s o economic g ow h and he ac o s ha in luence i s a e. I highligh s he impo ance o echnological
ad ancemen , human capi al, capi al accumula ion, and ins i u ional ac o s in shaping economic de elopmen , as ci ed
by Newcas le Uni e si y. The majo Concep s in G ow h Theo y a e:
• Neoclassical G ow h Theo y: This heo y is based on he ole o capi al accumula ion, labo o ce g ow h, and
echnological ad ancemen s in d i ing economic g ow h.
Abs ac
G ow h is one pa o achie emen ha conside s de elopmen o be a p ocess whose ul ima e goal is o aise
people's li ing s anda ds ac oss he wo ld. This p ocess in ol es indi idual a ound coun ies o be mo e
economically independen , which in u n equi es in e nal coope a ion. E e y go e nmen needs o make plans o
imp o e he economic, social, and poli ical li es o i s people sus ainably i i wan s o see g ow h and p og ess.
Only h ough ex ensi e coope a ion and coo dina ion can de elopmen ini ia i es bea ui . The e o e, economic
de elopmen is one o he main aims o economic policy in many coun ies o he wo ld. By building he p ocess o
economic de elopmen , we can c ea e he h eshold o sus ainable g ow h, ensu ing s abili y and secu i y in he
coun y. In he ligh o he abo e, he wo k looks in o he di e en heo ies o economic g ow h, ac o s in luencing
economic g ow h in a socie y, he symme ical and linea heo y o ela ionships.
Keywo ds: economic de elopmen , weal h accumula ion, sus ainabili y, g ow h and heo ies.
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• New G ow h Theo y: This heo y dwells much on he ole o knowledge, inno a ion, and human capi al in
d i ing economic g ow h.
• Endogenous G ow h Theo y: This heo y says ha economic g ow h is mo i a ed by in e nal ac o s wi hin
he economy, such as policies ha encou age esea ch and de elopmen .
• Uni ied G ow h Theo y: This heo y ies o b idge he gap be ween neoclassical and new g ow h heo ies by
in eg a ing ac o s like popula ion dynamics and echnology in o a single model.
Fac o s In luencing Economic G ow h in a Socie y:
• Technological Ad ancemen : Technological p og ess and inno a ion play a c ucial ole in inc easing
p oduc i i y and e iciency, leading o highe ou pu ,
• Human Capi al: In es men in educa ion, aining, and skills de elopmen enhances he wo k o ce's
p oduc i i y and inno a ion capaci y, as ci ed by he Co po a e Finance Ins i u e.
• Capi al Accumula ion: In es men in physical capi al, such as in as uc u e and machine y, con ibu es o
highe p oduc ion capaci y.
• Popula ion G ow h: Popula ion g ow h can lead o a la ge labo o ce, bu also inc ease he demand o
esou ces, which can limi g ow h.
• Ins i u ional Fac o s: S ong ins i u ions, including he ule o law, p ope y igh s p o ec ion, and e ec i e
go e nance, c ea e a s able en i onmen o economic g ow h.
Theo e ical Re iew
Fo he pu pose o his esea ch, we examine he ollowing heo ies: Ha od and Doma 's G ow h Theo y o he
Economy. A ew examples a e Ha od (1939) and Doma , E. (1946), and Kaldo (1956) heo y o economic g ow h. The
expansion o economies is explained by he Ha od-Doma hypo hesis. Fo he economy o unc ion wi hou hiccups,
Ha od and Doma wan ed o de e mine how quickly wages should ise. G ow h was shown o be p opo ional o bo h
sa ings a e and capi al p oduc ion a io in he model. Model-p edic ed expansion (G) is ep esen ed as:
G= S/K,
Whe e k- inc emen al capi al minus ou pu a io;
S is he a e age p opensi y o sa e.
The example e ealed ha whe eas sa ings di ec ly impac g ow h, he inc emen al capi al/ou pu a io indi ec ly a ec s
g ow h in he opposi e di ec ion. Acco ding o he idea, an inc ease in he a e o in es men would indica e a
con inua ion o he upwa d end in eal income and ou pu . I 's a sel -pe pe ua ing cycle: a ise in he alue o c ude oil
means mo e income o he coun y ha expo s i , which may be pu owa d u he economic g ow h ia sa ings and
in es men .
The Keynesian heo y ejec ed he classical heo y's p emise ha a coun y's s anda d o li ing should be de e mined only
by i s mone a y policy. The new heo y, howe e , p oposes an in e es a e-media ed ela ionship be ween money supply
and p ices ha is nei he p opo iona e no di ec . As Jhingan (2005) explains, his link be ween mone a y heo y and he
heo y o p oduc ion and employmen is acili a ed by in e es a es, which a e cen al o Keynes's heo y.This is because
a lowe in e es a e esul s om a la ge money supply, which in u n inc eases in es men and agg ega e demand, which
in u n inc eases ou pu and employmen . When people ha e a be e quali y o li e, hey a e mo e likely o spend money
and look o wo k, bo h o which boos he economy.
The global economy migh be se e ely impac ed by he e e -changing p ice o c ude oil. When he p ice o c ude oil
ises, he e ms o comme ce shi , and money mo es om coun ies ha impo oil o hose ha expo i , as s a ed by
Majidi (2006). S anda d economic heo y p edic s ha he longe a sus ained inc ease in c ude oil p ices las s and he
highe hey a e se , he mo e se e e he economic impac will be. Coun ies ha a e ne impo e s o c ude oil eel he
e ec s o a ise in oil p ices ia highe in la ion, lowe eal GDP, ewe jobs, and a less a o able exchange a e.
Inc eased in e es a es a e a di ec esul o he go e nmen 's de ici spending, which in u n a ec s ax e enue. As
employees a e unlikely o accep ac ual pay cu backs in esponse o a ise in he p ice o c ude oil, in la iona y wage
p essu es a e likely o inc ease as a esul , mani es ing hemsel es in a a ie y o ways (Wake o d, 2006).
To illus a e he coun ies ha expo oil, a ise in c ude oil alue has a mul iplica i e e ec on GDP, employmen , he
exchange a e, ax e enue, a budge su plus, low in e es a es, and mode a e in la ion. The economies o coun ies ha
expo c ude oil p o i when he p ice o pe oleum inc eases because na ions ha buy i mus pay mo e. I he coun ies
ha expo c ude oil e ain he money hey make and in es i domes ically, he economy expands and mo e people ind
employmen .
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The Keynesian iew ha as long as an economy has no a ained i s h eshold o ull wo k o ce pa icipa ion, any spike in
he ci cula ion o cash o he p ice would be insu icien in boos ing he deg ee o labo and p oduc ion a he han
a ec ing he o e all p ice ajec o y in he economy means ha Nige ia is unlikely o encoun e subs an ial in la ion as a
consequence o an upsu ge in he p ice o c ude oil. As long as he economy is no a ull capaci y, he Keynesian and
Kaldo ian heo ies o economic g ow h ag ee ha he money supply will inc ease in andem wi h a he han
independen ly o he o e all le el o p ices. In his case, a boos in e enue will cause an inc ease in in es men and
ou pu .
Wha Kaldo e ms " he echnical p og ess unc ion" is he in e sec ion be ween ising capi al in es men and ising
p oduc i i y. Due o i s b oad usage in manu ac u ing, anspo a ion, and o he ope a ions, he ising cos o c ude oil
migh impac he cos o all o he economic inpu s. Ene gy cos s go up, and indi iduals use less o i as he p ice o c ude
oil ises. I is widely belie ed ha na ions ha expo ne quan i ies o c ude oil would see an inc ease in hei eal
na ional income as a esul o a ise in oil p ices. Howe e , dec easing demand o expo s as o he na ions su e
economically may o se some o hese ad an ages.
An analy ic ounda ion o oil p ice a ia ions is p o ided by he no ion o linea and symme ic connec ions. Acco ding
o he heo y, unce ain y a ound oil p ices slows economic expansion. Alenoghena and Aghughu (2022) demons a ed
ha i is possible o ge a deepe unde s anding o he pa hways ia which oil p ice ola ili y in luences economic
de elopmen by using he econome ic side o he linea o symme ic connec ion hypo hesis. All he same, he o he
ideas e alua ed he e a e s ill e ol ing because o he complexi y, he lack o clea -cu judgmen s, and he dea h o
clea ly isible empi ical exp ession. Indi idual backg ounds ha e a signi ican bea ing on he pu po ed success i s
p oponen s ha e achie ed wi h he idea.
While land, labo , and money all play signi ican oles in he s anda d model o de elopmen , undamen al ene gy
sou ces like oil a e gene ally o e looked. Al-Risheq. (2016) a emp ed o de ise s a egies ha explain he co ela ion
be ween oil ea nings and economic expansion.
Bu mos o he ea lie in es iga ions, especially he me hods o es ima ion, we e shown o ha e majo laws. Acco ding
o one s udy, o example, he a iables we e shown o be non-s a iona y a le els bu s a iona y a di e ences
(O iakhi&Osaze, 2013). The es ima ions o a iance decomposi ion and G ange causali y igno ed he o de o
in eg a ion since he a iables we e exp essed in le el o ms. This esea ch was unde aken o ill ha in o ma ional
need.
The Symme ical and Linea Theo y o Rela ionships
Changes in oil p ices, acco ding o he linea /symme ic connec ion model o de elopmen ad oca ed by Cha eddine and
Ba ka (2020) as well as Ojiku u e al., (2017) esul in unp edic able g ow hs o he economy.A hypo hesis was
de eloped using da a on oil p ices and hei impac on impo ing and expo ing coun ies om 1971 o 2019. Sule-Iko
and Ib ahim (2021) looked a how he ise and all in oil p ices om 1971 o 2019 a ec ed he Nige ian economy.
Reduc ions in oil p ices, he said, we e o blame o nume ous economic down u ns in Nige ia. Based on his, he
concluded ha luc ua ions in oil p ices a ec ed he economy as a whole.
Resea ch by Alenoghena and Aghughu (2022) shows ha oil p ice ola ili y has a di ec and in e se e ec on company
expansion. Cha eddine and Ba ka (2020) ound ha he co ela ion be ween company expansion and oil p ice ola ili y
is in e se and he indings o he econome ic s udies show ha a ise in oil p ices leads o a dec ease in GDP, whe eas a
dec ease in oil p ices leads o less no iceable e ec s on GDP due o di e ences ac oss coun ies.
Impac s Asymme y Theo y
The concep o asymme ic e ec g ow h was applied o he Nige ian economy. The hypo hesis ha luc ua ions in oil
p ices had no bea ing on he s a e o he Nige ian economy was examined by Cha eddine and Ba ka (2020). Acco ding
o Oke ee al. (2021), Nige ia's economic de elopmen is impac ed by oil p ice ola ili y in a numbe o ways. The
asymme ic ool be ween oil p ice ola ili y and economic g ow h was cla i ied by Obi e al. (2018) using he h ee
ec o s o sec o al shocks, unce ain y, and coun e -in la iona y mone a y policy. He conies o he conclusion ha
go e nmen s ha e s a ed enac ing an i-in la iona y measu es in ligh o he ecen inc eases in oil p ices. Alenoghena
and Aghughu (2022) ag eed wi h Obi e al., (2018) ha he e ec o luc ua ing oil p ices on a coun y's eal GDP canno
be ully cha ac e ized by mone a y policy alone.
Theo izing he Renaissance
The inspi a ion o his concep a ose om he angen ial ela ionship be ween he concep s o symme y and asymme y
in e ec s. Agyae al., (2022) a emp o di e en ia e be ween luc ua ions in oil p ices and ola ili y. The s anda d
de ia ion o e a speci ic pe iod is he mos eliable indica o o ins abili y. Bo h, acco ding o Umo ue al., (2018), a e
ha m ul o economic expansion, bu in di e en ways. An uns able en i onmen has a signi ican and immedia e impac ,
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whe eas luc ua ions in oil p ices a e el o e he nex yea . Agyae al., (2022) concu s ha he ola ili y and
unp edic abili y o oil p ice mo emen s, a he han he oil i sel , a e he p ima y ac o s ha a ec economic
de elopmen .
Empi ical Re iew
O iakhi and Osaze (2013) used he VAR me hod o look a wha happened o Nige ia's economy om 1970 o 2010 when
oil p ices wen up and down. Checking o uni oo s, b eaking down he a iance, and doing a G ange causali y analysis
a e all common s eps in he es ima ion p ocess. Budge a y alloca ions, c ude oil p ices, in la ion a es, GDP g ow h, and
he amoun o money in ci cula ion we e all aken in o accoun . The indings showed ha he ac ual exchange a e, he
eal go e nmen budge , and he eal impo s we e all di ec ly impac ed by changes in oil p ices. Howe e , eal
go e nmen spending, in la ion, and he money supply a e all co ela ed wi h changes in oil p ices. In his scena io,
changes in he p ice o oil se e he Nige ian go e nmen by de e mining how much money is spen on he coun y's
go e nmen and he e o e how he economy g ows. ,
Using da a om 1970 o 2014, Ebele (2015) analyzed how changes in oil p ices a ec ed Nige ia's GDP g ow h. Recen
esea ch uses an agg ega e demand pa adigm ha concep ually links analy ical a iables o look a p oduc ion
pe o mance beyond he oil p ice and se e al o he indi idual ac o s. We examined he long- and sho - e m co ela ions
be ween oil p ice ola ili y and economic g ow h using he G ange ep esen a ion app oach and he Engel-G ange
coin eg a ion es . The indings demons a ed ha al hough oil ese es and e enue we e bene icial o he Nige ian
economy, luc ua ing oil p ices damaged he coun y's economy.
Akpan (2009) used he VAR me hod o look in o how sudden changes in he p ice o oil a ec he Nige ian economy.
The sea ch o a uni oo , a dissec ion o he a iance, and he de ec ion o coin eg a ion a e all pa s o he s udy. They
looked a go e nmen spending, he p ice o oil, in la ion, GDP, he amoun o money in ci cula ion, and he eal
e ec i e exchange a e. This s udy shows how a change in oil p ices a ec s di e en pa s o he economy in di e en
ways. Resul s showed a a o able link be ween oil p ice luc ua ions and go e nmen expendi u e. Unexpec edly, he
da a also demons a ed ha he p ice o oil had li le e ec on he expansion o he manu ac u ing sec o .
F om 1981 h ough 2012, Alley, Asekomeh, Mobolaji, and Adeni an (2014) used he momen co ela ion echnique o
analyze how oil p ice shocks a ec ed he Nige ian economy. The esea ch shows ha oil p ice shocks don' ha e much o
an e ec on economic g ow h, bu oil p ices ha e a big e ec on hei own. Since oil is good o economic g ow h, many
people hink ha ising oil p ices a e good o oil-p oducing coun ies like Nige ia. Ye he s ikes c ea e ha oc and make
i di icul o he go e nmen o depend on oil e enues.
Uma and Abdulhakeem (2010) examined how shi s in oil p ices impac Nige ia's economy o e all using he VAR
app oach. The es ima e includes uni oo , G ange causali y, VECM, coin eg a ion, and impulse esponse es s. A
numbe o a iables we e conside ed, including he p ice o c ude oil, he GDP, in la ion, unemploymen a e, and he
amoun o money in ci cula ion. Oil p ices ha e a majo impac on he money supply, GDP, and unemploymen a e, bu
no on he consume p ice index. The indings demons a ed ha h ee signi ican mac oeconomic indices in Nige ia we e
signi ican ly impac ed by a ia ions in oil p ices. This means ha he ola ili y o mac oeconomic pe o mance will
make i ha de o manage he economy as a whole. To lessen he impac o unce ain y, a di e se economy is c ucial.
Adamu (2015) posi s ha he d op in oil p ices had a big e ec on he economy o Nige ia. This s udy used he o dina y
leas squa es (OLS) echnique and he T- es o compa e oil income in Nige ia be o e and a e he global oil p ice
decline o see whe he he e was a s a is ically signi ican di e ence. The esul s demons a ed ha he wo ldwide d op in
oil p ices had a conside able e ec on Nige ia's oil ea nings and p icing. I has been sugges ed ha he coun y’s u u e
weal h should be in es ed in he oil indus y’s iches.
Olusegun (2008) used he VAR me hod o igu e ou how oil p ice shocks a ec ed he g ow h and de elopmen o
Nige ia's economy. The es ima e includes he a iance decomposi ion, he uni oo es , and he coin eg a ion es . The
assessmen o his model akes in o accoun a numbe o ac o s, including eal GDP, oil e enues, go e nmen capi al
expendi u es, consume p ice index, money supply, and oil p ices. The e is p oo ha luc ua ions in he p ice o oil ha e
a signi ican impac on he oil indus y's ou pu and e enue. Also, he esea ch shows ha he ecen ise in oil p ices has
had li le e ec on he eal money supply, go e nmen spending, and consume p ice index. Based on hese esul s, we
can say ha iscal policy could be used o help he Nige ian economy du ing an oil shock.
Olomola (2006) looked a da a om 1970 o 2003 o igu e ou how he oil p ice shock a ec ed he Nige ian economy.
The VAR app oach was used, which includes se e al s a is ical es s like a uni oo es , a iance decomposi ion, and
coin eg a ion analysis. S anda d de ia ions o pe cen age changes in oil p ices o e small in e als we e used o measu e
p ice ola ili y. The i e independen a iables in he s udy we e he eal e ec i e exchange a e, in la ion, oil p ices, and
he amoun o money in ci cula ion. The esul s showed ha he p ice o oil has a bigge e ec on he exchange a e han
i should, bu no much e ec on ou pu o in la ion.
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Ayadi (2005) uses he VAR me hod o igu e ou how changes in oil p ices a ec ed Nige ia's economy om 1980 o
2004. The es ima o employs he a iance decomposi ion, a iance analysis, and he uni oo es . Oil p ices, in e es
a es, indus ial p oduc ion indices, cu ency exchange a es, and he money supply we e all conside ed. This analysis's
p ima y ocus is on how changes in oil p ices a ec manu ac u ing-d i en economic g ow h. The indings indica e ha
changes in oil p ices ha e an impac on he eal exchange a e, which in u n has an impac on indus ial ac i i y.
Howe e , his is a negligible indi ec e ec o oil p ices on p oduc ion. As a esul , he s udy's indings lend c edence o
he heo y ha Nige ia's indus ial p oduc ion and oil p ices ha e li le di ec ela ionship. I seems he cu en oil p ice is
ha ing li le e ec on p oduc ion.
Acco ding o Omoke and Uche (2021), he membe s o OPEC a e p o oundly a ec ed by oil p ice luc ua ions. Oil
p ices ose sha ply om his o ically low le els in he ea ly 1970s o e y high ones in he la e 1980s. The p ice o c ude
oil e en ually began o decline a e ha . The e a e a lo o playe s in he oil p ice game, including p oduce s, me chan s,
and consume s. As an o ganiza ion, OPEC's p incipal esponsibili y has always been o keep he oil p ice s eady.
Acco ding o Cha eddine and Ba ka (2020), oil p ices d opped by 58.15 pe cen be ween 1981 and 1994 as he
economy de e io a ed. Due o hei economies' eliance on oil expo s, his is a disas ous u n o e en s o he membe
na ions (Uche and E iom, 2021).
Acco ding o Ahmed e ah, (2012), he way he global oil ma ke has de eloped since he la e pa o he 1980s has
alida ed he con en ional economic heo y ha s a es ha in a si ua ion whe e p oduce s ha e eno mous excess
capaci y, hei compe i i e p icing and p oduc ion s a egies will depend no only on how la ge and how well hey use
hei exis ing capaci y, bu also on he ma ke 's pe cep ion o he dispa i y be ween supply and demand. Since oil's
disco e y, jus a hand ul o companies ha e domina ed he indus y. The go e nmen does no in luence he p ice o oil
o he amoun o oil p oduced; a he , i compe es wi h p i a e companies o ea n ax money by selling d illing licenses
(Aye e ah, 2014). Hence, he oil ma ke is seen as one in which he oil ca el has un ai ly a o ed i s in e es s a he
expense o s a e in e es s by se ing p icing and dis ibu ion o ma ke sha e a will (Fa ouh, 2011). ,
The oil ma ke has p og essed since OPEC cu ailed ou pu in 1982. OPEC also slashed p ices in 1982 because o
ola ili y, bu he accompanying unce ain y kep a p oduc ion ceiling in place. In 1986, OPEC s a ed ha se e al na ions
g an ed membe ship by membe s om ac oss he wo ld we e included, which led o highe p ices (Gold, 2014). When i
comes o whe he oil p ices mo e up o down, a b oad a ie y o di ec and indi ec ac o s, om economics o poli ics,
play a ole. One g oup could coun e deals by publicly sa egua ding he in e es s o p oduce s by se ing a bogus p ice o
oil, while ano he g oup pu s up o ganiza ions o gua an ee ha he in isible hand is gi en a ai oppo uni y o decide he
wo ldwide p ice o oil (Ru a and Venables 2012).
Oil p ices, acco ding o Lu z (2009), migh mo e up o down based on ma ke demand and supply. When he p ice o oil
goes up and down a ound he wo ld, supplie s change how much oil hey sell. When supply exceeds demand, he excess
is s ockpiled o la e use. When demand exceeds supply, he oil ma ke and oil supplie s look o win-win al e na i es,
such as using he ex a supply o mee he addi ional demand. While non- OPEC p oduce s p o ide 60% o he wo ld's
oil, hey do no ha e enough ese es o signi ican ly in luence oil p ices. Acco ding o Omoke and Uche (2021), hey
need o jus adjus o changes in global ma ke places. Ye , when supply om non-OREC coun ies declines, OPEC can
hike p ices on he oil ma ke .
Since oil u u es con ac s can be aded eely on he open ma ke , specula i e demand can cause he p ice o his good
o change. Acco ding o Rai u and Osho a (2022), as he p ice o oil goes up o specula i e easons, mo e in es o s will
buy u u es. Specula i e demand anxie y can be seen in se e al o eign legisla i e c ises, like hose in he Middle Eas .
The e is gene ally li le a en ion paid o how hese conce ns will in luence oil p oduc ion, e en hough hey a e
signi ican due o hei e ec on expec ed u u e p oduc ion ins abili y (Lu z, 2009). Fo example, in 2008, specula o s
pushed oil p ices o an unsus ainable le el, bu by la e 2009, he p ice had plumme ed owing o a lack o demand o oil
a ha le el.
The US dolla is o en used as a benchma k cu ency on he global oil exchange ma ke . Oil p ices end o inc ease in
andem wi h he decline in he dolla 's alue because o he co ela ion be ween he wo Obi e al., (2018). A ise in he
alue o he dolla would ins ead educe oil demand, leading o a dec ease in p ice.As mos oil deals a e se led in dolla s,
luc ua ions in he dolla 's alue migh a ec he economies o oil-expo ing na ions. Because oil is expensi e and ha d o
ind, indus ialized coun ies a e looking a coal and sola powe as al e na i es o oil (Ojiku u, e al., 2017). The ising
cos o oil has inc eased he spo ligh on al e na i e ene gy op ions. As mo e people explo e al e na i es o oil, p ices will
go down.
The global inancial c isis o 2008 is only one example o how economic ins abili y, such as ha obse ed in he global
inancial ma ke s, may cause a decline in oil demand and p ice. Olayeni e al., (2020) opine ha he collapse o he
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inancial sys em con ibu ed o he s eep decline in oil p ices. The oil ma ke 's ex eme ola ili y is no hing new in he
wo ld economy. The p ice o oil luc ua ed widely, pa icula ly du ing pe iods o global economic unce ain y. Mo eo e ,
oil p ices du ing he global inancial c isis demons a ed e y ola ile beha io and le a las ing imp in on in es o s'
minds (Mhalla, 2020).
Global go e nmen ac ion may also ha e an impac on he p ice o oil. Fo ins ance, he Uni ed S a es has h ea ened wa
wi h o he oil-p oducing na ions and imposed sanc ions on I an and I aq. Acco ding o Nwosa (2020), gi en ha
go e nmen s con ol and manage mos o he wo ld's oil esou ces and ese es, he in e na ional oil ma ke is ex emely
poli icized and does no ope a e like a ee ma ke . Policy decisions made in oil-expo ing na ions ha e an impac on he
global p ice o oil. I he go e nmen we e o ban oil explo a ion in an a ea wi h p o en ese es (like he Gul o
Mexico), he oil ma ke would see his as a ca as ophe o he oil supply and d i e up he p ice o oil (Flo ence and
Chioma, 2019).
The oil ma ke is e y esponsi e o OPEC's decisions (Bashe e ah, 2018). The O ganiza ion o he Pe oleum
Expo ing Coun ies (OPEC) is he p ima y cause o oil p ice luc ua ions since i supplies 40% o he wo ld's oil and
es ablishes egula ions o i s membe na ions (Nige ia included) o mee global demand (Omoke and Uche, 2021).
OPEC p ima ily con ols he oil ma ke by aising o dec easing ou pu om i s membe na ions, which has a signi ican
impac on he ma ke p ice o oil. In 2006, OPEC decided o cu supply alloca ion, which may ha e con ibu ed o he oil
p ice ise in 2007 and 2008. (Fa ouh, 2011).
I an oil- ich egion u ns ou o be poli ically uns able, oil p oduce ma ke s may espond by bidding up he p ice o oil.
This ensu es ha goods may be sold o as much as possible. Acco ding o Adeleke e al., (2019), a soa ing demand may
occu despi e a s a ic supply, all due o he illusion o sca ci y. Oil p oduc ion in Nige ia has been poli ically
unp edic able since he Nige Del a Wa . Dispu es in he a ea ha e hei o igins in claims o esou ce sca ci y, demands
o mo e managemen o oil asse s, and he dissa is ac ion o oil-dependen people (Gboyega e al., 2011).
Nige ia is an impo an pa o OPEC's oil expo s because i has a lo o oil. In lows o billions o dolla s ha e been
made possible by Nige ia's oil weal h since i s disco e y. Ye , jus like in o he de eloping coun ies, he ising incomes
ha e no led o be e li ing condi ions o he a e age pe son. This is because many coun ies a e s uggling o keep hei
economies s able in he ace o p oblems like co up ion, ine iciency, poo managemen , smuggling, and oo much
go e nmen aid o e ined oil p oduc s (Balouga, 2012).
Wi h i s la ge oil ese es, Nige ia is one o A ica's mos de eloped coun ies (37.1 billion ba els). Simila ly, oil is he
key economic engine, con ibu ing 15% o GDP and deli e ing o e 90% o expo e enues. (Gboyega e al., 2011).
Acco ding o Alenoghena (2020), a apid decline in oil p ices would ha e a de as a ing e ec on Nige ia's economy.
This pa e n has sp ead as eliance on oil in he economy has g own. Despi e he oil boom o he 1970s, he ede al
go e nmen con inued o un a budge de ici due o needless expendi u e on consump ion and se e al "whi e elephan "
p ojec s. Un o una ely, Nige ia's p esen adminis a ion has ailed o adjus o he new economic eali ies b ough abou
by he global glu and subsequen educ ion in oil p ices. Nige ia's cu en economic disas e may be aced back o a
nea - o al decline in oil p ices. The na ion ell in o ecession as he p ice o oil plumme ed om o e US$140 pe ba el
o a ound US$40 pe ba el in la e 2015.
The oil business in Nige ia has been booming since he Shell Company made i s i s disco e y in 1956. Despi e his,
o eign companies had sway in he indus y un il he ea ly 1990s, when Nige ian-owned i ms began making in oads. In
Nige ia, he Nige ian Na ional Oil Coope a i e was he i s s ep owa d widesp ead in ol emen by indigenous
businesses (KPMG, 2014). '
The Ge man en e p ise Nige ia Bi umen Co po a ion es ablished a p esence in Nige ia in 1908; explo a o y ope a ions
hal ed in 1914 due o he onse o Wo ld Wa I. In 1938, Shell and BP picked up whe e hey had le o . Up un il ha
yea , 1955, Shell was he only company in he Uni ed S a es legally allowed o engage in oil explo a ion. Se e al o he
companies, including Mobil, Texaco, Che on, Agip, To al, Ashland, Phillips, Tennessee, he Nige ian Na ional Oil
Coope a i e, and he Nige ian and Japanese- owned Hen y S ephens, joined he oil explo a ion e o la e on. Due o
Shell's oil disco e y in 1974, p oduc ion inc eased om 229 million o 815 million ba els. The cu en oil p oduc ion
boom may be a ibu ed in pa o he highe success a es o bo h new oil ield explo a ion by oil companies (especially
a e 1965) and exis ing oil ield ou pu (Imobighe, 2015).
In 1964, he Nige ian go e nmen buil a e ine y in he ci y o Po Ha cou . All o he ci y's oil was sen elsewhe e
un il he Po -Ha cou e ine y in Ha cou was cons uc ed. The a e age annual g ow h in demand o e ining oil in he
Uni ed S a es be ween 1970 and 1978 was 23.4%. To mee his demand, he Wa i e ine y, wi h a o al capaci y o
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100,000 ba els pe day (b/d), was buil in 1978. In 1980, he need o oil led o he cons uc ion o he Kaduna Re ine y,
which can p ocess up o 260,000 bpd. Po Ha cou now boas s i s ou h such acili y (Imobighe, 2015).
Nige ia is a de eloping na ion, wi h a la ge po ion o i s popula ion li ing a o below he po e y line, despi e he
coun y's ich oil ese es (Gboyega, Minh, Shukla, and So eide, 2011).
F ankel (2005) pu s economic g ow h in he same ca ego y as disposable income, income dis ibu ion, sus ainabili y,
ex a cash, main ainabili y, democ acy, and human igh s as pa s o economic de elopmen . G ow h is me ely one pa
o de elopmen , acco ding o Remenyi's (2004) concep . He conside s de elopmen o be a p ocess whose ul ima e goal
is o aise people's li ing s anda ds ac oss he wo ld. This p ocess e ol es a ound indi idual coun ies becoming mo e
economically independen , which in u n equi es in e na ional coope a ion.
E e y go e nmen needs o make plans o imp o e he economic, social, and poli ical li es o i s people egula ly i i
wan s o see g ow h and p og ess. In indus ialized coun ies, hese kinds o plans may aim o imp o e he abo e a eas o
li e, while in less- de eloped coun ies, he main goal is economic g ow h. Only h ough ex ensi e coope a ion and
coo dina ion can de elopmen ini ia i es bea ui . Nige ia's ini ial go e nmen , gua an eeing pa ies, and gene al
populace ha e all ailed o adequa ely suppo o coo dina e ini ia i es o he coun y's de elopmen . When i comes o
his i al ac i i y ha equi es inpu om c i ical domains, he bo om-up p ocess seems o ac i a e in e e se, as shown
by his o ical da a. They show how he planned app oachis unde unded, which discou ages i s implemen a ion (Ibie an
and Elchosuehi, 2013). The key economic de elopmen plans o Nige ia may be ound he e, and hey da e back o 1981.
Pe iods alling wi hin hese anges signi y imes o momen ous social, poli ical, and economic uphea al ha necessi a ed
swi and spo adic esponses om he exis ing adminis a ion.
Focusing on domes ic esou ces, echnical ad ances, and a new na ional o ien a ion, he ou h na ional de elopmen plan
ied o gi e wo ke s a sense o discipline and ea lessness and se he s age o he coun y's long- e m social and
economic g ow h (Edo &Ikelegbe, 2014).
Acco ding o Edo and Ikelegbe (2014), he p og am's b oade objec i es included, among o he hings, s eng hening he
coun y's exchange a e, imp o ing aw ma e ial and ood p oduc ion, e inancing and ea anging ade obliga ions,
expanding he a ailabili y o elec ici y, dec easing unemploymen , and inc easing eal income. As pa o his plan, i is
hough ha 82 billion Nige ian nai as will be in es ed. The go e nmen is accoun able o he emaining 70.5 billion
nai a, while he p i a e sec o is esponsible o he emaining 11.5 billion nai a. This expendi u e was an icipa ed o add
7.2% o yea ly GDP g ow h. A e he p og am ended, i was also mean o ha e imp o ed people's s anda ds o li ing
(Egonmwan and Ibodje, 2001).
S ill, he plan was hampe ed by a lo o deb om o eign loans aken ou ea ly in he yea and ising impo cos s caused
by a sha p d op in oil p ices. The ex en o he goals achie ed was, wi hou a doub , diminished by hese limi a ions (Edo
&Ikelegbe, 2014). Ibie an and Ekhosuehi (2013) ound ha he economic adjus men measu es o 1982 had a big e ec
on plan implemen a ion. This was in addi ion o he ac ha oil e enues we e uns able, which was al eady known.
The e was a clea di e ence be ween wha he measu emen s showed and wha was needed o unde s and he s a egy's
g ow h goals. The plan was he mos ailed economic bluep in in Nige ia's his o y since i was de as a ed by he
economic c isis ha ollowed he oil p ice d op o 1981.
The S uc u al Adjus men Plan (SAP) was sold o he public as a s opgap measu e ha would expi e in 1988. Ye i
pe sis ed a e ha un il 1994 when i was no longe go e ned. I was he mos no el s a egy o add essing Nige ia's
endu ing economic woes, bu i 's also he mos con o e sial p og am o adjus men and de elopmen he na ion has e e
a emp ed (Edo &Ikelegbe, 2014). Edo and Ikelegbe (2014) s a e ha he i s SAP implemen a ion se ed wo pu poses
which a e modi ica ions o domes ic consump ion and p oduc ion pa e ns o educe eliance on impo ed ma e ials.
The indus ial base needs o be widened so ha he economy doesn' depend so much on oil expo s and so ha i can
expo mo e goods o he han oil. Bu Osi o-Whiskey (1993) showed ha SAP was c ea ed wi h se e al goals in mind,
like:
1. Weakness o he Nai a
2. The in e es a e should be de egula ed.
3. All cu en p oduc and se ice subsidies om he go e nmen will end.
4. T ans o ma ion o p e iously s a e-owned en e p ises in o p i a e co po a ions
The main goals o he p og am we e no me , which we e o lowe in la ion, s abilize he cu ency, educe he need o
impo s, and inc ease expo s o hings o he han oil. Because o his, i collapsed in 2006. An examina ion o SAP by
Edo and Ikelegbe (2014) e ealed ha , ini ially, he p og am was success ul in achie ing i s goals, including he
elimina ion o he an iqua ed impo pe mi sys em, he encou agemen o a sizable inc ease in cu ing-edge p oduc ion,
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and he ini ia ion o small ini ial expo s o ag icul u al ha es s. The alue o he nai a ell om N1.00 o SUS1.00 in
1986 o N18.60 in 1992 (Al-Risheq, 2016). Since hen, he economy has been in a cons an s a e o decline, wi h he
dolla d opping o abou N400.00.
A sys em whe eby in e es a es as high as 45-50% we e pe mi ed eme ged once a es we e libe alized. Because o his,
access o c edi and he capaci y o wo k wi h banks we e se e ely hampe ed, manu ac u ing jobs we e los , he economy
embled, and po e y and unemploymen a es inc eased (Edo &Ikelegbe, 2014).
This pe iod o Rolling Plans, which eo ganized Nige ia's economic adminis a ion o employ sho - e m ins umen s,
was mocked by Daggash (2008), who called i "a ime o he olling s ones ha ga he ed no g eene y." In 1990, we
en e ed his pe iod. He con inued by saying ha in 1996, a conce ed a emp was made o exp ess a na ional ision
eco d, e med Vision 2010, o cons uc a long- e m na ional plan upon which p og ess could be gua an eed.
Adubi (2002) says ha he p e ious adminis a ion didn' se up he Commi ee o Vision 2010 un il 1996. This means
ha he olling plan wasn' used un il 1990, he ea lies yea i was used. The Commi ee's p ima y ecommenda ion in i s
1997 epo o he go e nmen was ha he Vision se es as he d i ing o ce behind all ini ia i es (long, medium, and
annual). I seems ha he p e ious go e nmen , which ook o ice in 1998, was esponsible o he dea h o he ini ia i e.
Ugwu (2009) s a es ha he goal was o be pu in o ac ion h ough a se o i een-yea s a egies co e ing many ime
ho izons. He con inued by saying ha by 2010, e e yone in Nige ia will be able o a o d he basics o li e. The p ojec
ailed o ul ill i s aims in pa because, as Egonmwan and Ibodje (2001) hypo hesized, he e was no ob ious ela ionship
be ween he na ional olling amewo k, Vision 2010, and he yea ly inancial plan.
The people o Nige ia we e gi en a mo al obliga ion o unde go a signi ican men al ans o ma ion in se ice o an
a icula ed goal as pa o Vision 2010. Whe he o no conscious e o s we e aken o ensu e ha as many indi iduals as
possible ha e access o hese necessi ies is an open ques ion ha has emained a isible ba ie o policymaking and had
expec ed implica ions on he implemen a ion and e inemen o exis ing p og ams (Ibie an and Ekhosuehi, 2013).
Fo he Nige ian economy's ins i u ional and s uc u al weaknesses, he go e nmen ins i u ed he e o m s a egy. These
plans we e d awn up o gi e Nige ia's p og ess a be e chance o succeeding. I was so success ul ha i supe seded all
ea lie plans in he coun y. The documen acknowledged he coun y's issues and o e ed solu ions o ix he economy.
Na ional Economic Empowe men and De elopmen S a egy (NEEDS) unding was supposed o come om bo h he
ede al go e nmen and s a e and local go e nmen s (Edo &Ikelegbe, 2014). Acco ding o Edo and Ikelegbe (2014), he
objec i es o NEEDS a e as ollows:
1. A shi in na ional p io i ies
2. A luence Gene a ion
3. dec eased incidence o po e y
4. Job c ea ion
To each he goals se ou in he NEEDS epo , i has been ound ha he go e nmen spends a big chunk o i s annual
budge on heal h ca e, ag icul u e, wa e esou ces, educa ion, anspo a ion, de ense, and ene gy. The widesp ead claim
o unspen asse s being e u ned by Minis ies, Depa men s, and Agencies o Go e nmen a he end o he yea and he
massi e, una oidable co up ion mean ha e en alloca ing subs an ial a es in budge s does no gua an ee he eliable
execu ion o p ojec s i o con eying he acili ies o he public (Ibie an and Ekhosuehi, 2013). As such pe asi e o ms
o co up ion a e impossible o ci cum en , he plan is doomed o ailu e.
I 's us a ing ha go e nmen o icials ha en' caugh on o wha NEEDS is ying o do. E en hough Nige ia's annual
budge has inc eased om he billions o nai a be o e NEEDS o he illions o nai a oday, he coun y's pe capi a
income has d opped o only one dolla (Ikeanyibe, 2009). Du ing ha pe iod, Nige ians expe ienced asigni ican inc ease
in he numbe o educa ional ins i u ions, all o be e he coun y's popula ion h ough inc eased li e acy. Du ing he
yea s 1999 and 2007, a ound o y- nine new uni e si ies we e ounded. Despi e an inc ease in educa ional acili ies, i is
eg e able ha ewe locals can a end because o he p ohibi i e expense o highe educa ion (Ikeanyibe, 2009). As a
esul , i o ensi ely impeded he educa ion o such esiden s.
O e se en million new jobs we e p edic ed o be p oduced ia NEEDS by 2007. The adminis a ion's plans o each his
goal, howe e , we e coun e p oduc i e o i s s a ed goal o inc easing employmen . As a esul o he go e nmen 's
e o s o es uc u e i s ins i u ions, many wo ke s we e laid o . Compulso y e i emen led o he e mina ion o 804
jobs a Nige ia's Cen al Bank in 2005. (Ikeanyibe, 2009). Simila ly, NEEDS has allen sho o i s in as uc u e
de elopmen a ge s. The majo goal o NEEDS was o inc ease elec ici y gene a ion and supply; hence, i was
disappoin ing o see powe gene a ion and supply d op while he p og am was in e ec (Ikeanyibe, 2009). Adegboyega
(2006) ound ha NEEDS, like p e ious Nige ian de elopmen p og ams, ailed o p o ide he desi ed esul s.
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The Obasanjo adminis a ion in oduced Vision 2020 in 1999 o boos Nige ia's g ow h a e om i s cu en s a us as a
de eloping economy o one o he wo ld's op 20 de eloped economies by he yea 2020 and es ablish Nige ia as he hub
o economic decision-making in A ica. I hey can cle e ly pool hei esou ces, Nige ia and o he eme ging na ions—
including Egyp —a e expec ed o ank among he op 20 economies in he wo ld by 2025, say hose who suppo he
no ion. (Ugwu, 2009).
Ugwu (2009) says ha when he p og am was o e , Nige ia's GDP g ow h a e would ha e been highe han I aly's. S ill,
Ugwu (2009) said ha GNI and GDP g ow h eco ds a e used as scales as pa o hese me ics. He s essed ha Vision
2020 doesn' ha e clea goals o he han he policy s a emen s made by di e en pa s o he cen al go e nmen .
Daggash (2008) says ha one o he goals o Vision 2020 is o se up a s able, democ a ic, and p ospe ous economy by
he yea 2020. Daggash (2008) comes o he clea conclusion ha he goals can be eached wi h he help o e e yone
in ol ed. Pa ne s like he Nige ian g ass oo s we e le ou o he p ocess, e en hough hey we e needed o hei
suppo and o wo k oge he .
When compa ed o o he de elopmen plans in Nige ia, Vision 2020 is no excep ion. Nige ia will no be one o he op
20 de eloped economies in he wo ld by 2020, and he p og am did no succeed in making he coun y he hub o
economic decision making on he A ican con inen . While he Cen al Bank o Nige ia (CBN) p edic ed a GDP g ow h
a e o 5.4% o 2033 and 6.3% o 2014, hese numbe s a e much lowe han he an icipa ed 13.8% needed o Nige ia o
be one o he wo ld's op 20 de eloped economies by 2020.
The e has been no imp o emen in Nige ia's economic s a us, which Onyenekenwa (2011) claims o ha e seen.
Acco ding o Onyenekenwa (2011), he majo i y o he popula ion is now impo e ished, and he e a e no signs o
imp o emen . They a e esiden s o as , u al egions ha ha e ye o see signi ican economic o social de elopmen .
Vision 2020 has ailed a e jus h ee o i s planned 21 yea s ha e' passed. The go e nmen o Nige ia has se oil- ela ed
goals and objec i es, and he oil policy de ails how hey in end o achie e hose goals and objec i es. Fi e conside a ions
al e he ou look on Nige ia's oil s a egy. Speci ically, hey a e:
1. Objec i es o boos ing oil p o i s
2. The impo ance o ensu ing ene gy independence
3. E o s a e being made o boos oil p o i s.
4. Imp o emen s o he economy's ene gy and mone a y ounda ions
5. How Nige ia's oil s a egy i s wi hin he global con ex
Fo a e y long ime, he Nige ian go e nmen had e y li le ole in he oil indus y, wi h o eign businesses con olling
mos o he big and signi ican ope a ions. The only hing he go e nmen did was ge money om he oil companies in
he o m o oyal ies, dona ions, and axes. Tha was abou o change, howe e , once he Nige ian go e nmen
p oclaimed he Pe oleum Ac o 1969, No. 51, and published i in Supplemen No. 62 o he Na ional O icial Gaze ee
o he Fede a ion, Volume 56, Sec ion A, on No embe 27, 1969. (KPMG, 2014).
Businesses ha wan o sell essen ial oils legally mus i s ge pe mission om he ede al go e nmen and he igh
pe mi s. One o he main goals o hese laws was o make he Nige ian Na ional Oil Company an o icial oil business.
Wi h his, Nige ia's go e nmen began o ake an ac i e ole in he p ocess. The cu en Nige ian Na ional Pe oleum
Co po a ion was o med in 1977 when he o ganiza ion me ged wi h he go e nmen 's Minis y o Pe oleum. F om oil
disco e y o oil e inemen and dis ibu ion, his company is engaged in i all. Nige ia es ablished ou e ine ies, wo in
Po Ha cou and he o he s in Wa i and Kaduna, as a s a ing e o in he a emp o ensu e Nige ia's sel -su iciency in
he supply o oil. E en wi h hese e ine ies in ope a ion, a signi ican po ion o local oil consump ion is me by impo s.
The coun y's o eign ese es ha e su e ed as a esul . The Nige ian legisla u e sough oil impo s o co e he
coun y’s de ici o h ee mon hs a he heigh o he oil c isis. No ma e he o igin, he asse ion ha i impo ed
pe oleum a an a i al p ice o N18 pe li e was in es iga ed by he ele an au ho i ies (Imobighe, 2015).
Nige ia's oil indus y is c ucial because o he money i b ings in o he go e nmen . Se e al au ho s, such as Rai u and
Osho a (2022), ha e alked a leng h abou how impo an oil is o he Nige ian economy. A he cu en ime, oil expo s
con ibu e mo e han 70% o Nige ia's go e nmen e enue. Du ing he decades o he 1960s and 1970s, oil's sha e o he
go e nmen 's o al budge ed income inc eased om N280,000 o N3 million (Sanusie al., 2022). To al oil expendi u es
as a pe cen age o GNI ose om $43 million in he 1970s o $12 billion in he 1990s. No wi hs anding he ola ili y o
he oil ma ke , oil has emained Nige ia's p ima y d i e o economic de elopmen . Nige ia's economy elies hea ily on
he e enue i ecei es om oil expo s; hus, his con ibu ion is equally impo an . The inc ease in expo p o i s om
oil sales has s eng hened he coun y's in e na ional ading posi ion. Be ween 1958 and 1974, he pe cen age o he
coun y's expo e enues a ibu able o oil climbed om 7% o 92%. An impo an shi in he coun y's balance o
paymen s is he esul (Oke ee al., 2021).
