THE IMPACT OF OIL PRICE MOVEMENT ON NIGERIAN MACROECONOMIC PERFORMANCE

The paper investigated the impact of oil price movement on key macroeconomic performance variables and as well empirically accounted for how the Nigerian economy reacts to the different movements in oil price. The counter-cyclical behaviour in the relationship between oil price and macroeconomic variables in Nigeria required the use of multivariate model with the pre-estimation test used as a guide to identify the appropriate one to be adopted, VECM was used among these four competing multivariate technique based on the outcome of the pre-estimation test. The study avails the policy makers the opportunities to better acquaint themselves with possible ways of mitigating the adverse effects of negative impact of oil price fluctuations and also to harness and better utilise the largesse of positive oil price changes. Hence, the study recommended enhanced economic diversification by increasing the contributions of other sectors to GDP and increase the export earnings accrued to the nation from the real sector as against the present revenue structure that rely solely on oil proceeds that is subject to incessant price fluctuations and international politics.