The Effect of Over Reliance on Natural Resources on the Nigerian Economic Well-being

Running head: THE EFFECT OF OVER RELIANCE ON NATURAL RESOURCES ON
THE NIGERIAN ECONOMIC WELL-BEING
The Effect of Over Reliance on Natural Resources on the Nigerian Economic Well-being
Name of the Student
Name of the University
Author Note

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THE EFFECT OF OVER RELIANCE ON NATURAL RESOURCES ON THE NIGERIAN
ECONOMIC WELL-BEING
Acknowledgement
The concerned research has been a learning experience for me and I would like to take this
opportunity to thank my professor for being a constant support and for guiding me in the
research related activities. I would also like to convey my sincere gratitude to my mentors
and my colleagues who have provided extremely valuable insights and suggestions which
have helped me not only in writing this thesis but also in developing my personal insights
which I believe will help me in my future endeavours.

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THE EFFECT OF OVER RELIANCE ON NATURAL RESOURCES ON THE NIGERIAN
ECONOMIC WELL-BEING
Abstract
In the contemporary period, with Globalisation, trade liberalisation as well as industrial
revolution, the issues of natural resources depletion and environmental degradation have been
becoming issues of immense concern across different countries across the globe. This in turn,
makes it immensely crucial for the governments of different countries, to take into
consideration the costs as well as the benefits of usage and extractions of natural resources
and the implications of the exploitation of such resources on the overall welfare of the
population of the countries across the globe. This over reliance of the countries and especially
the economies and industrial aspects of the countries have both positive and also negative
implications on the economic well-being of countries. The concerned research, keeping this
into consideration tries to analyse the impacts of such over reliance on natural resources
(especially oil and natural gas) by Nigeria, on the economic well-being of the concerned
country. The analysis has found both positive and negative influence of natural resources on
economic well-being of people in Nigeria. There is an improvement in Human Development
Index with increase in crude oil and natural gas production. It can thus be confirmed that
increasing production of crude oil and natural gas has an opportunity to improve overall
development of Nigeria. With expansion of extraction and production, there is scope for new
employment opportunities in industries directly or indirectly related with these resources.
This in turn helps to lower unemployment and increases average income and living standard
of people living there. The effect of resource extraction on inflation however is ambiguous.
For crude oil production, the impact is positive while for natural gas the effect is negative.
The inflationary influence of neither of the two resources however is statistically significant.

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THE EFFECT OF OVER RELIANCE ON NATURAL RESOURCES ON THE NIGERIAN
ECONOMIC WELL-BEING
Table of Contents
Chapter 1: INTRODUCTION....................................................................................................8
1.1 Introduction......................................................................................................................8
1.2 Background of the Research............................................................................................9
1.3 Research Significance....................................................................................................10
1.4 Problem Statement.........................................................................................................11
1.5 Research Aim.................................................................................................................11
1.6 Research Objectives.......................................................................................................11
1.7 Research Questions............................................................................................................12
1.8 Structure of the Thesis...................................................................................................13
Chapter 2: LITERATURE REVIEW.......................................................................................15
2.1 Introduction....................................................................................................................15
2.2 Natural Resources: Meaning and Definition..................................................................15
2.2.1 Types of Natural Resources....................................................................................16
2.3 Importance of natural resources.....................................................................................18
2.3.1 Economic importance of natural resources.............................................................19
2.3.2 Role of natural resources in economies across the globe........................................20
2.4 Reasons behind over reliance and over exploitation of natural resources.....................21
2.5 Over exploitation of natural resources and economic performance...............................23
2.6 Natural resources and over reliance: Case study of Nigeria..........................................24
2.7 Economic condition of Nigeria......................................................................................26
2.8 Literature Gap................................................................................................................28

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THE EFFECT OF OVER RELIANCE ON NATURAL RESOURCES ON THE NIGERIAN
ECONOMIC WELL-BEING
2.9 Conceptual Framework..................................................................................................28
Chapter 3: RESEARCH METHODOLOGY...........................................................................29
3.1 Introduction....................................................................................................................29
3.2 Research Philosophy......................................................................................................29
3.3 Research Design.............................................................................................................30
3.4 Research Approach........................................................................................................31
3.5 Data Types, Collection and Analysis.............................................................................32
3.5.1 Data Type................................................................................................................32
3.5.2 Data Collection........................................................................................................33
3.5.3 Data Analysis..........................................................................................................34
3.6 Research Hypotheses.....................................................................................................34
3.7 Ethical Consideration.....................................................................................................35
Chapter 4: RESULT AND DISCUSSION...............................................................................36
4.1 Introduction....................................................................................................................36
4.2 Results............................................................................................................................36
4.2.1 Descriptive Statistics...............................................................................................36
4.2.2 Analysis of correlation............................................................................................39
4.2.3 Regression analysis.................................................................................................40
4.3 Discussion......................................................................................................................49
4.4 Conclusion......................................................................................................................52
Chapter 5: CONCLUSION AND RECOMMENDATION.....................................................52

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THE EFFECT OF OVER RELIANCE ON NATURAL RESOURCES ON THE NIGERIAN
ECONOMIC WELL-BEING
5.1 Conclusion......................................................................................................................52
5.2 Linkage to the literature.................................................................................................53
5.3 Limitation.......................................................................................................................53
5.4 Recommendation............................................................................................................54
Summary..................................................................................................................................54
References................................................................................................................................55
Declaration...............................................................................................................................61

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THE EFFECT OF OVER RELIANCE ON NATURAL RESOURCES ON THE NIGERIAN
ECONOMIC WELL-BEING
List of Figures
Figure 1: Thesis Structure........................................................................................................13
Figure 2: Types of Natural Resources on the earth..................................................................17
Figure 3: Herman Daly’s Pyramid...........................................................................................20
Figure 4: Global population growth over the years.................................................................22
Figure 5: Increase in oil production and consumption of Nigeria (1980-2005)......................24
Figure 6: Production and consumption of natural gas in Nigeria (1980-2003).......................25
Figure 7: Sector-wise divisions of the economy of Nigeria in the contemporary period........26
Figure 8: Unemployment conditions in Nigeria over the years...............................................27
Figure 9: GDP growth rate of Nigeria over the years..............................................................27
Figure 10: Conceptual framework...........................................................................................28
Figure 11: Types of Research Philosophies.............................................................................29
Figure 12: Types of Research Design......................................................................................30
Figure 13: Types of Research Approaches..............................................................................31
Figure 14: Types of Data..........................................................................................................32
Figure 15: Types of Data Sources............................................................................................33

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THE EFFECT OF OVER RELIANCE ON NATURAL RESOURCES ON THE NIGERIAN
ECONOMIC WELL-BEING
List of Tables
Table 1: Descriptive statistics for crude oil and natural gas....................................................36
Table 2: Descriptive statistics for HDI, per capita GDP, inflation and unemployment...........37
Table 3: Correlation matrix......................................................................................................39
Table 4: Impact of crude oil production on HDI of Nigeria....................................................40
Table 5: Impact of crude oil production on per capita GDP of Nigeria...................................41
Table 6: Impact of crude oil production on inflation of Nigeria..............................................42
Table 7: Impact of crude oil production on unemployment of Nigeria...................................43
Table 8: Impact of natural gas production on HDI of Nigeria.................................................43
Table 9: Impact of natural gas production on per capita GDP of Nigeria...............................44
Table 10: Impact of natural gas production on inflation of Nigeria........................................45
Table 11: Impact of natural gas production on unemployment of Nigeria..............................46