Transmission Channel of Oil Supply Disruption on the Nigerian Economy

Abstract

The impact of oil and gas supply disruption on Nigerian economy has been various studied. The importance of such studies derives from the key role of oil and gas in the Nigerian economy. However, it remains to be established, the channel through which oil and gas supply disruption affects the Nigerian economy. Consequently, this study is intended to bride this knowledge gap. We use the Structural Vector Autoregressive model to assess the transmission channel of oil supply disruption on the Nigerian economy, using government expenditure and revenue as proxies. The study revealed that government expenditure does not respond significantly to oil supply disruption. Also, the result showed that government revenue channel of transmission of the effect of oil supply disruption to the Nigerian macroeconomic environment do not exist, even in the recent time.