NON-OIL SECTORS, ECONOMIC DIVERSIFICATION AND GROWTH IN NIGERIA: FURTHER EMPIRICAL EVIDENCE

Ademola Obafemi Young
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Ademola Obafemi Young: Department of Economics, Mountain Top University, Ogun State, Nigeria

Studies in Business and Economics, 2022, vol. 17, issue 1, 290-311

Abstract: The adverse consequences of over-reliance of Nigerian economy on oil has continued to heighten the call and need to diversify the productive base of the economy towards non-oil sectors. To heed the call, successive governments have implemented several economic policies at different periods. However, while the contents of these policies are plausible, the full-anticipated benefits are far from being realized. The disappointing results have been linked to two principal factors: the incoherent implementation of the policies and neglect of the country-specific circumstances. Informed by the need to take cognizance of the country’s peculiar circumstances, the question as to which priority sectors that Nigeria should target for diversification efforts has come up in literature. Empirically, in view of the country’s natural resource abundance, studies have suggested agricultural, industrial and many others non-oil sectors as plausible options for diversifying the economy. In light of this, the study examines the interactions among non-oil sectors, economic diversification and growth in a multivariate VAR model over the period 1960-2019. Empirical results reveal that while an expansion of economic activities into resource-based sectors is a necessary condition for diversification; however, it is not a sufficient condition as the dimension of the diversification matters.

Keywords: Economic Diversification; Non-Oil Sectors; Innovation Accounting Techniques; Resource-Rich Developing Countries (search for similar items in EconPapers)
Date: 2022
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