Empirical investigation on the Impact of Oil Price Fluctuations on Economic Growth of Oil Producing Countries in Africa - Evidence from Nigeria

Abstract

This study looks at how changes in oil prices affect economic development of African oil-producing nations, using Nigeria as case study with special emphasis on inflation, interest rate and exchange rate from 2000 to 2024. Findings show that Nigeria's economic growth positively and significantly affect oil prices with the regression coefficient of 4.27 and p. value of 0.0003, inflation significantly affects economic growth with the coefficient of 0.12; and p. value of 0.019, exchange rate and gross domestic product have a statistically significant negative coefficients of –0.10; p. value of 0.013. On the other hand, interest rate has a statistically negligible negative impact on gross domestic product with the coefficient of –0.02; p. value of 0.117. Therefore, the analysis confirms that changes in oil prices have a major impact on Nigeria's economic growth trajectory, hence there is the need for urgent sectorial diversification and structural reforms to aid economic development.

Keywords:       Oil Price Fluctuations, Economic Growth, Inflation Rate, Exchange Rate, Interest     Rate