ABSTRACT
This
study seeks, to examine an appraisal of the Nigerian oil sector-issues and
challenges between 2008-2012. In addition, the study sought to evaluate if the
Nigeria oil sector has impacted positively on the overall development of the
country as required. The interactive interview was employed to explain the
theoretical and empirical analysis of this study. The study applied normal
z-test to ascertain if the variables needed for infrastructural development can
be achieved and to ascertain if oil production has improved the living standard
of Nigerians.
The result of the z-test on oil production and infrastructural
development of the country reveals that the industry has positively impacted
significantly on the infrastructural development of the country. Also, the
result of the Z-test on causal relationship between oil production and standard
of living of Nigerians reveals that there is no significant casual relationship
between the oil production and the standard of living in the count. The
researcher recommends that Nigeria oil sector should contribute effectively in
improving the living standard of Nigerians and the overall development of the
economy.
TABLE CONTENT
Title Page
Approval page
Certification
Dedication
Acknowledgements
Abstract
List of tables
Table of contents
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
1.2 Statement of Problem
1.3 Objectives of the Study
1.4 Research Hypotheses
1.5 Significance of the Study
1.6 Scope and Limitations of the Study
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 Origin of Nigeria Oil Industry
2.2 Nigeria Economy and the Oil Industry
2.3 Contributions of the Oil Sector to Nigeria Economy
2.4 Oil Industry and Fuel Subsidy
2.5 Issues in the Removal of the Fuel Subsidy
2.6 Consequences of Fuel Subsidy Removal
2.7 Challenges in the Oil Sector
2.8 Oil Sector and the Infrastructural Development of
the
Nigeria Economy
2.9 Oil Sector and the Standard of Living of Nigerians
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Selection of Data
3.2 Area of Study/Population of Study
3.3 Questionnaire Design
3.4 Data Collection Method
3.5 Analysis of Data
3.6 Theoretical Concept of Analysis
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1.1 Social Strata of Respondents
4 .1.2 The Standard of Living of Average Nigerian
4.1.3 The Condition of Nigeria Growth
4.1.4 The Contribution of Oil Sector to the Overall
Economic Growth of Nigeria
Level of Infrastructural Development in Nigeria
vis-Ã -vis Oil Sector Contribution to Overall
Economic Growth
4.1.6 Impact
of Oil Sector Contribution on the Standard of Living of Nigerians
4.1.7 Other
Sectors that Contributes to the Standard of
Living of Nigerians
4.1.8 Impact
of Oil Subsidy Investment in the Standard of Living of Nigerians
4.1.9 Further Subsidy Withdrawal for Investment
4.1.10 Areas
that Government should invest more of the
4.1.11
Oil Subsidy
Withdrawal
4.1.12
Does Oil
Production in Nigeria cause any damage to the citizens of Nigeria
4.1.12 Does Oil Production
Nigeria Provide Employment
Opportunities for her Citizens
4.1.13 Does Federal Government Effectively
Allocate the
Benefits that accrue from Oil
Production to Nigerians
4.2 Analysis of Hypotheses
4.2.2 Hypothesis I
4.2.2 Hypothesis II
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary
5.2 Conclusion
5.3 Recommendations
References
Appendix
I
Appendix
II
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The growth of oil sector in Nigeria appears to have
brought dramatic changes in the structure of the economy since 1970. In less
than a decade, agriculture’s share of Gross Domestic Product (GDP) declined
from roughly 50% to less than 30% and its erstwhile pre- eminence as generators
of state revenue and foreign exchange all but vanished.
Crude oil become one of the world’s most strategic
natural resources required as crucial input in contemporary economic
activities. It is a highly demanded commodity in both rich and poor countries,
providing about 5 of the global energy requirements. (Eke, 2010). In Nigeria,
the oil industry has risen to the commanding heights of the economy,
contributing the lion share to Gross Domestic product (GDP) and accounting for
the bulk of federal government revenue and foreign exchange earnings since
1970.
Thus oil sector have assumed a predominant role in the
global economic framework, providing much of the energy that drives the economy
in both industrialized and developing countries. In Nigeria, the nature of the
oil sector remains the predominant source of revenue generation of federal
government. It also remains a priority for the Nigerian government as the
revenue that comes from oil resource exploitation is a major source of foreign
income for Nigeria and a means of settling her external debt oil sector is also
a source of taxation revenue and employment and offers the opportunity for the
transfer of technology from developed to developing counties. In this respect,
the Organization of Petroleum Exporting Countries (OPEC) which comprises eleven
countries from the developing world, has played a leading role in the global
oil industry, promoting market stability and ensuring steady flow of revenue
accruing to member countries of the cartel.
However, the emergence of oil as a major commodity in
the global market has transformed the economies of Nigeria. It has served to
boost economic growth and accelerated development and has heralded structural
difficulties which have undermined economic performance and compounded
development trends in Nigeria. Indeed, Nigeria’s extreme reliance on the crude
oil market has triggered structural difficulties for the economy; as earnings
from crude oil fluctuate along with market trends which are exacerbated by the
country’s neglect of other productive sectors of the economy.
In recent time, government found it necessary to
ascertain how much crude oil would be adequate for domestic petroleum product
demand. In achieving this goal, they try to get rid of a policy that various
governments’ have attempted to reform but failed. This has called for subsidy
removal to help government address the imbalance between recurrent and capital
expenditures in Nigeria, encourage foreign investment in downstream sector,
infrastructure, free move of funds for local investment in the oil sector,
increase and repair of local refinery production, reduce importation of refined
products in the medium to long-term and eventually stabilize market prices as
completion increases. Therefore, the idea is a good one as it was intended to
give the average Nigerian access to cheap petroleum products.
1.2 Statement
of Problem
In spite of the contributions of oil sector to the
growth of the Nigerian economy and the ameliorating of poverty, the rate of if development
does not seen to be commensurate with the rate of misery brought to the
country. Oil production has brought supply uncertainty fueled by the poor
management of the nation’s refineries, endemic corruption, lack of
transparency, undue government interference and unnecessary bureaucratic
processes. Despite the nation’s huge endowment of crude oil and gas and the
extensive infrastructure available in the sector for exploration, distribution
and marketing of petroleum products, the oil sector has been hit by increased
instability hall-marked by a dearth of product of supply. Particularly, this
problem has become noticeable and has led to massive importation of petroleum products
by federal government and major oil marketers in Nigeria.
Therefore, in a bid to ascertain the effects of oil
sector on Nigerian economy, the researcher provides the following research
questions:
i. What
impact has oil production in Nigeria had on the infrastructural development of
the country?
ii. Is
there any causal relationship between oil production in Nigeria and the
standard of living of Nigerians?
1.3 Objectives
of the Study
This study has its broad objective of, “Appraising the
Nigerian Oil Sector, Issues and Challenges between 2008-2012” specifically study
seeks to:
(i) Determine
the effects of oil production on infrastructural development of the country.
(ii) Ascertain
the impact of oil production in the standard of living of Nigerians.
1.4 Research Hypotheses
To
accomplish the objectives of the study, the following hypotheses were
formulated:
Hypothesis I
Ho: Oil
production in Nigeria over the years has not positively impacted significantly
on the infrastructural development of the country.
H1: Oil
production in Nigeria over the years has positively impacted significantly on
the infrastructural development of the country.
Hypothesis II
Ho There
is no significant causal relationship between oil production in Nigeria and the
standard of living of Nigerians.
H1: There
is significant causal relationship between oil production in Nigeria and the
standard of living of Nigerians.
1.5 Significance
of the Study
The goal of this research work is to provide a basic
tool for other researchers and understanding of the contributions of oil sector
in the development of the Nigerian economy vis-Ã -vis infrastructural
development and the standard of living of Nigerians.
The findings of this research work and the
recommendations contained therein will form a robust working material for
researchers and government agencies in creating a fountain of knowledge for the
experimentation and substantiation of their policies on oil sector in the
country and in the execution of projects to improve the economic growth and
infrastructural development of the country, as well as improve per capita
income of her citizens.
The study will also help the policy makers to draw a
rational conclusions on the way forward by improving the oil sector in meeting
up with the country’s expectations. The study will extend the existing
literature by emphasizing on the issues and challenges of the oil sector in
Nigerian economy.
1.6 Scope
and Limitations of the Study
This study shall make use of data from 2008-2012, a
total of five years. The study will focus on the issues and challenges facing
the Nigerian oil sector.
One of the major challenges of this study was the
scarcity of data on the research variables. It was difficult in sourcing
accurate and reliable, data from the repositories like the Central Bank of
Nigeria (CBN) and Federal Bureau of Statistics (FBS). However, these
limitations did not significantly affect the study.
Time frame required to carry out this research was
short. But, the researcher speared no time, hence was able to cope with the
timing.
APPRAISAL
OF THE NIGERIA OIL SECTOR: ISSUES AND CHALLENGES (2008-2012)
A CASE
STUDY OF SELECTED OIL COMPANIES
DEPARTMENT
OF ECONOMICS
FACULTY
OF SOCIAL SCIENCES
URBAN
UNIVERSITY COLLEGE, ABAKALIKI,
EBONYI
STATE
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