THE IMPACT OF OIL PRODUCTION ON ECONOMIC DEVELOPMENT AND POVERTY ALLEVIATION

Abstract:

This paper investigates the impact of oil production on economic development and poverty alleviation from 1990 to 2022. As one of Africa’s largest oil producers, Nigeria has witnessed significant economic changes due to its oil wealth; however, this has not translated into equitable growth or substantial poverty reduction. The study aims to analyze the effects of inflation rates, tariffs, and literacy rates on economic development and poverty alleviation. Analytical methods include the Augmented Dickey-Fuller unit root test, cointegration test and First Difference ARDL model. The study reveals that despite generating substantial oil revenues, over 40% of Nigerians live below the poverty line, underscoring the phenomenon of the “resource curse.” Furthermore, it identifies gaps in policy effectiveness, local community engagement, and long-term economic sustainability. By analyzing the relationship between oil production and socio-economic outcomes, this paper calls for targeted policy interventions that prioritize equitable wealth distribution and sustainable development strategies to mitigate poverty in Nigeria. The study emphasizes the need for economic diversification and balanced sectoral development to optimize economic potential and enhance welfare in Nigeria.

Keywords: Economic Development, Inflation, Oil Production, Poverty Alleviation, Resource Curse, Tariffs