The Impact of Oil Price Shocks on the Economic Growth and Development of Cross River State, Nigeria

Abstract

With decreasing demand for fossil oil globally, international oil prices have fallen continuously, reaching an all time low of below $30 lately. This has several implications on the Nigerian public finance structure at national and sub-national levels. The study investigated the impact of this plunge on the economic development of Cross River State, Nigeria and found that international oil price shocks affected the State’s economy inversely, while a positive but insignificant relationship existed between the other model variables and the economic growth of the State. Consequently, the study recommends that CRS government should de-emphasize the over-reliance on crude oil revenue and seek and optimize earnings from other non-oil sectors of the economy.Further, the State’s economy should be diversified to boost internally generated revenue with less dependence on Federal government revenue allocation. Finally, there should be effective machinery for checks and balances put up by the government to stem fiscal abuse and wastage of resources by the ministries, departments and agencies in the State.