Crude Oil Price, Exchange Rate Volatility and Economic Growth In Nigeria, (1970-2014)
Economic growth is one of the macroeconomic objectives of nations. Nigeria’s major export commodity is crude oil, though the quantity exported is determined externally because of her membership of OPEC.This dependence has made her sensitive and vulnerable to the fluctuations in crude oil price and exchange rate. This study looks at the impact of the uncertainty in crude oil price and exchange rate on Nigeria’s economic growth prospects. The study measures the volatility of crude oil prices and exchange rate using taking the standard deviation f yearly average, then uses the VAR model in the analysis of the relationship between crude oil price and exchange rate volatility and economic growth. The study found out that crude oil price and exchange rate have a significant and positive influence on Nigeria economic growth but the influence of crude oil price was found to be more than that of exchange rate. The study recommended broadening of Nigeria export base.