Munich Personal RePEc Archive

Impact of Oil Production on Human Condition in Nigeria

Isola, W.A. and Mesagan, E.P. (2014): Impact of Oil Production on Human Condition in Nigeria. Published in: West African Journal of Monetary and Economic Intregration , Vol. 14, No. 1 (12 December 2014): pp. 84-102.

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Abstract

This article focused on the impact of oil production on human condition in Nigeria. The study used environmental degradation, life expectancy, and infant mortality rate as proxies of human condition. The data were obtained from the statistical bulletin of the Central Bank of Nigeria and World Development Indicator. The study covered 1980 to 2012. Vector autoregressive (VAR) model and variance decomposition analysis were explored. Three striking results were reported: (i) oil production of the first period positively impacted environmental degradation, while it was negative in the second period; (ii) Its first period lag has positive relationship but second period lag has negative relationship with life expectancy; and (iii) The variance decomposition analysis showed that oil production worsened environmental degradation and adversely impacted on infant mortality rate, while it positively affected life expectancy. Two major recommendations emanated from the study: (i) since oil production has a negative impact on human condition in Nigeria, efforts should be made to control carbon emission from fuel by ending gas flaring, especially in the Niger Delta region; and (ii) Government should look for means to channel their efforts into sustainable policies that would aim at transforming some of the largess from the oil sector into the health sector, as well as into the provision of infrastructural and life enhancing facilities like good roads, portable water, and so on. These can help to enhance life expectancy beyond its current stagnating state. All these as suggested will make the oil sector to have huge positive impact on human condition.

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