Boosting non-oil revenue for sustainable development in Nigeria: does domestic resource mobilisation matter?

Abstract

This paper examines the determinants of non-oil revenue in Nigeria in the context of sustainability, with a view to assessing the crucial role of domestic resource mobilization. To determine the short and long run drivers, the autoregressive distributed lag (ARDL) bound test technique for co-integration was utilised. Also, the Strength, Weakness, Opportunities and Threat (SWOT) analysis was used to analyse the major sources of domestic resource mobilization available to the Nigerian government. Empirical results indicate that summation of non-oil real output, annual average effective exchange rate, infrastructure, lagged value of the ratio of the total oil exports to GDP and government policy were significant in determining the levels of actual non-oil revenue. The SWOT analysis reveals that sustained growth in real GDP, domestic savings, tax, capital market, foreign direct investment, remittance, diaspora funds, sovereign wealth funds, pension funds, and infrastructure bond are important sources of domestic resource mobilization and thus, vital to Nigeria’s quest for sustained inclusive development.

Keywords: Non-oil revenue drivers, domestic resource mobilization, ARDL, SWOT analysis