Research Article Open Access Usman et al., Bus Eco J 2015, 6:2 DOI: 10.4172/2151-6219.1000149 Volume 6 • Issue 2 • 1000149 Bus Eco J ISSN: 2151-6219 BEJ, an open access journal Keywords: Petroleum; Nigerian economy; Foreign reserve; Development capital; GDP; Oil revenue Introduction Petroleum or oil or crude oil also referred as oil and gas as will be used interchangeably in this study emerged from being supportive economic sector in the 1960s to the predominant source of foreign exchange, development fnance and international investment opportunities in the 1980’s and 1990’s. Te history of petroleum industry in Nigeria revealed that oil was frst discovered in 1956 at Olaibiri in the Niger Delta, the discovery was made by Shell–BP and actual production and exportation started in 1958. Petroleum since then has continued to play a predominant role and account for about 90 percent of Nigeria gross earnings. Tis dominant role has pushed other sector especially Agriculture, the traditional main-stay of the economy, from the early 50’s and 60’s; to the back ground NNPC [1]. Te Oil sector being a capital intensive sector provides 80 percent of the budgetary revenue, 95 percent foreign exchange earnings and contributes over 14 percent to the Gross Domestic Product. Nigeria is now heavily depending on crude oil for survival. Te rise of oil price from 1999 to its pack price made Nigeria one of the fastest growing countries in the world with the International Monetary Fund projecting a growth of 9 percent in 2008 and 8.3 percent in 2009 Anthony [2]. Te government used the revenue derived from oil through tax and royalties to carry out developments in the country Gbadebo [3] but little or nothing has been done to support the sector since its discovery. No efort has been made to empower the locals; not even the government–owned oil companies have received the needed empowerment to take leading role in the industry Alex and Hamisu 2013 [4]. Tis attitude has in the last fve decades made the country to be a spectator in its own territory, leaving the production and exploration aspects of oil and gas in the hands of foreign oil majors. All the refneries built for the purpose of increasing the beneft of oil have all breakdowns and no efort is been put in place to wake them up. Tis study seeks to examine the impact of petroleum on economic development and growth of Nigeria. Tough, many scholars have argued that petroleum have impacted so much on Nigeria economy, negatively and positively. Some advocate for shif in emphasis i.e., from oil to non-oil sector which can also have similar impact on the economy. Some other said the sector should be supported. Te remaining part of this work will be arranged as follow: review of the impact of oil on Nigeria economy, methodology, results and discussion, test of hypothesis, conclusion/recommendation. Empirical review of the impact of petroleum on Nigeria’s economy Scholars and writers have argued positively as well as negatively on the impact of petroleum on the economy of Nigeria. Anthony argued that inspite of the huge rents from oil; the economy still grapples with many problems including high and rising unemployment rate, declining manufacturing production, high and rising level of poverty and poor infrastructural development. Furthermore, dismal performance of the Nigerian economy in the face of huge rents from oil has rekindled interest on the importance of oil in the growth and development process in Nigerian. However, scholars who have written on the impact of petroleum on the economy are more on the positive side than the negative side. As posited by Azaiki and Shagari [5] that petroleum industry occupies a strategic position in the economic development of Nigeria, Gbadebo [3] clearly states that crude oil production: domestic consumption and exportation has had a positive impact on the economic growth in Nigeria. Furthermore, percentage increase in crude oil production increases economic growth of Nigeria by over 0.01. in the same view, Onyemaechi [6] adds that the contribution of petroleum to the growth and development of the Nigeria economy can be enumerated in terms of the industry impact on the economic variables responsible for economic growth in Nigeria and it share of revenue generation in the Nigerian economy. From the foregoing we analyzed the impact of petroleum on Nigeria’s economy from the industry contributions to the growth and development of the economy, using the variables responsible for economic growth in Nigeria. Te variables include Education, Gross Domestic Product, Employment Opportunities, Foreign exchange Reserves, and Energy Supply etc. A number of funds are been set aside from crude oil revenue to contribute to development and growth of certain sectors including the petroleum sector. For example, Petroleum Technology *Corresponding author: Madu Ikemefuna, Doctorial Research Candidacies, Department of Business Administration, Nnamdi Azikiwe University, Awka, Nigeria, E-mail: efunam2003@yahoo.com Received March 20, 2015; Accepted April 09, 2015; Published April 16, 2015 Citation: Usman A, Madu I, Abdullahi F (2015) Evidence of Petroleum Resources on Nigerian Economic Development (2000-2009). Bus Eco J 6: 149. doi:10.4172/2151- 6219.1000149 Copyright: © 2015 Usman A et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Abstract The Study was an Examination of the impact of Petroleum on Nigerian Economy. The sector has been the main source of foreign reserve and development capital for the country. Yet little or nothing is been done to support the sector. The study was based on secondary data. Data was sourced from the Central Bank of Nigeria Statistical Bulletin and National Bureau of Statistics. The data used was a ten years record of GDP and Oil Revenue i.e., 2000-2009. Findings show that petroleum has signifcant and positive impact on Nigeria economy. The researchers therefore recommend that the sector should be supported so that the country can derive the full benefts of the sector. Evidence of Petroleum Resources on Nigerian Economic Development (2000-2009) Abdullahi Usman 1 , Madu Ikemefuna 2 * and Abdullahi Fatimah 2 1 Doctorial Research Candidacies, Department of Marketing, Nnamdi Azikiwe University, Awka 2 Doctorial Research Candidacies, Department of Business Administration, Nnamdi Azikiwe University, Awka Business and Economics Journal B u s i n e s s a n d E c o n o m i c s J o u r n a l ISSN: 2151-6219