This study empirically examined the interrelationship between the construction sector, oil prices, and the actual gross domestic product (GDP) in Nigeria. Using annual economic data from the National Bureau of Statistics (NBS), the OPEC Annual Statistical Bulletin, and econometric statistics, we found that although very strong positive and significant correlations exist between the construction sector output and total GDP output (0.934), the construction sector output and oil prices (0.856), and the total GDP output and oil prices (0.822), these linear relationships only exist for a short time. However, these relationships do not result in any direct causal influence on each other, except for the uni-directional Granger causal relationship that flows from the total GDP output to the construction sector output, which implies that economic activities of other major non-oil sectors stimulate the construction activities in Nigeria. Thus, we argue that neither the construction sector nor the oil prices directly influence the aggregate economy; rather, the other sectors' activities stimulate the construction sector in Nigeria. Two policy recommendations for achieving the Federal Government's medium term Economic Recovery and Growth Plan (ERGP) are suggested: (1) the Nigerian government should de-emphasize overreliance on the oil sector through policy readjustment and (2) an urgent need for economic diversification in Nigeria exists, since we revealed that an increase in the aggregate GDP output is due to the activities of other non-oil sectors.
This study analysed pre and post re-basing economic performance of Nigeria construction sector with a view to ascertaining if significant improvements have been achieved in terms of construction output, construction growth rate, contribution to Gross Domestic Product (GDP) and economic development. Data were obtained from the publications of the Central Bank of Nigeria and the National Bureau of Statistics from 1981 to 2015, and analysed using Z test and Pearson correlation. Statistically, the study found that there was significant improvement in the construction sector outputs and contribution to GDP after re-basing as the computed Z scores (-8.0381) and (-5.4647) were greater than the critical value (1.96) at 5% significance difference respectively. The correlation coefficients (0.706) and (0.561) and the p-values (<0.00001) indicated a strong and significant correlations. However, there was no significant difference in the growth rate of construction sector and GDP after re-basing as the computed Z scores (-0.2388) and (0.2835) were less than the critical value (1.96). The correlation coefficient (0.030) and (0.036) and p-values (0.81126) and (0.776794) also showed a very weak and non-significant correlation. This implied that Nigeria economic re-basing has triggered improvement in construction output and contribution to GDP but not in construction growth rate and GDP growth rate as previously believed.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
customersupport@researchsolutions.com
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.