Can Non-Oil Incomes Outride Oil Incomes in Nigeria? Evidence from Autoregressive Integrated Moving Average

Abstract

The study employed data from 1970 to 2014 to forecast government non-oil revenues and non-oil exports in Nigeria in an attempt to know the number of years it would take non-oil incomes to outpace the income from oil sources using Autoregressive Integrated Moving Average (ARIMA) Model. The results show that non-oil revenue of government will match the size of 2014 government oil revenue in 2023 (9 years), while it would take 466 years for non-oil exports to achieve the oil exports equivalence. However, it would take non-oil revenues and non-oil exports 14 years and 565 years respectively to achieve the 2011 historic highest oil incomes (oil revenues and oil exports) of 8,878.97 Billion Naira and 14,323.20 Billion Naira. Meanwhile, if non-oil revenue increases annually by 15 percent, using 2014 as base year, the target could be achieved in 2025 (11 years), but it would take non-oil exports annual increase of 18 percent to hit the target in 2030 (26 years). It is thus suggested that, while the current government revenue mobilization and strategies be maintained, the government efforts on export promotions vis-à-vis non-oil diversifications must be more than doubled in order to upturn the oil dependent Nigerian economy to non-oil economic base before the year 2050. 

Keywords: Oil Revenues, Non-oil Revenues, Revenue Forecast Nigeria,