Adedayo Emmanuel Longe1, Caleb Olugbenga Soyemi2, David Adeiza Agbanuji3, Oladayo Omitogun1 and Idowu Jacob Adekomi2

1Centre for Petroleum, Energy Economics and Law, University of Ibadan, Ibadan, Oyo State, Nigeria
2Department of Economics, Olabisi Onabanjo University, Ago Iwoye, Ogun State, Nigeria
3Energy Economics, Management and Policy, Emerald Energy Institute, Uniport, Nigeria

The study accounts for the structural break effect in the context of Nigeria. According to the findings obtained, the linear Autoregressive Distributed Lag (ARDL) bounds test reveals that the possibility of a long-term co-integrating relationship is inconclusive. When the study further accounts for asymmetry and the structural break period, however, the Nonlinear Autoregressive Distributed Lag (NARDL) bounds test reveals that there is no long-term co-integrating relationship among the variables in Nigeria within the specified period. According to the results of the NARDL test, both the positive and the negative changes in the oil price and energy use have a negative significant impact on economic growth in Nigeria in the short run, whereas the Consumer Price Index (CPI) exerts a positive and significant impact on economic growth in the short run. The Error Correction Model (ECM) result shows that the independent variables can correct about 94% of the short-run deviation of economic growth from equilibrium in the long run. The study concludes that, irrespective of the changes in the Bonny Light crude oil price, its impact remains the same on the Nigerian economic growth.

Keywords: oil price, consumer price index, energy use, economic growth

JEL Classification: C32, O13, O47

Economic Horizons2021, 23(2), 179-192. Published online August 2nd 2021