Natural Capital Management and Economic Growth in Nigeria

Abstract

The study examines the impact of natural capital (natural resource abundance, specifically the abundance of crude oil and natural gas) management on economic growth in Nigeria. It employs the ordinary least squares (OLS) multiple regression techniques to analyze the impact of natural capital, domestic economic investments, the openness of the economy, inflation, human capital investment and financial deepening on economic growth using five related econometric models for the period – 1981 to 2013. The study finds that the abundance of natural resources (crude oil and natural gas) in Nigeria had a positive impact on the growth of the nation’s economy within the period of study. It also notes that the impact of natural resource abundance on growth is enhanced with adequate human capital investments in a financially deepened economy. The study calls for more responsible management of natural resources in Nigeria, to alleviate the pains, miseries, strife and failed expectations the abundance of oil has caused to the people of the Niger Delta region, and to ensure that the benefits of oil get to all Nigerians fairly and equitably. Furthermore, to ensure sustainable growth, it recommends that the resources from oil should be strategically invested in developing other sectors with a view of moving the economy away from a primary to a manufacturing and service-based economy.