The Effect of Oil Tax Revenue on Economic Growth in Nigeria

Momah N. Sandra, Akintoye I.r and Ogbebor. I. Peter
Additional contact information
Momah N. Sandra: Department of Finance, School of Management Sciences, Babcock University Ilishan Remo, Ogun State, Nigeria
Akintoye I.r: Department of Finance, School of Management Sciences, Babcock University Ilishan Remo, Ogun State, Nigeria
Ogbebor. I. Peter: Department of Finance, School of Management Sciences, Babcock University Ilishan Remo, Ogun State, Nigeria

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 3, 793-805

Abstract: Nigeria’s fiscal policy faces challenges due to corruption, weak frameworks, and lack of fiscal discipline. The low tax-to-GDP ratio indicates untapped revenue potential. However, the country has considerable economic potential due to its population and natural resources. This study examined the effect of oil tax revenue on economic growth in Nigeria between 1986 to 2022. Autoregressive distributed lag modelling was used. The results indicate that oil tax revenue significantly drives economic growth in Nigeria, with a positive coefficient of 0.1966, meaning that an increase in oil tax revenue leads to a proportional increase in the long-run real GDP. However, the debt service ratio negatively impacts economic growth, as its increase leads to a decrease in log of real GDP (LRGDP). Although labor force and investment growth show positive coefficients, their effects on economic growth are statistically insignificant. Based on the study’s findings, the study recommended that the Nigerian government focus on enhancing the efficiency of oil tax revenue collection. This can be achieved by addressing challenges such as tax evasion, improving transparency, and ensuring that oil tax revenues are properly utilized for national development projects. An efficient oil tax revenue administration system would help boost the contributions of the oil sector to the national economy, which is crucial for sustained economic growth.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.rsisinternational.org/journals/ijriss/ ... -issue-3/793-805.pdf (application/pdf)
https://rsisinternational.org/journals/ijriss/arti ... c-growth-in-nigeria/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bcp:journl:v:9:y:2025:issue-3:p:793-805

Access Statistics for this article

International Journal of Research and Innovation in Social Science is currently edited by Dr. Nidhi Malhan

More articles in International Journal of Research and Innovation in Social Science from International Journal of Research and Innovation in Social Science (IJRISS)
Bibliographic data for series maintained by Dr. Pawan Verma ().