Oil dependent nations have the potential of economic growth and development in a stable international oil price system. However, the effect of oil price volatility in the evaluation of Nigeria national income and economy is imperative in the face of Nigeria reliance on oil becoming a dream as the negative effect on budget implementation is clearly discovered by researchers. This study evaluated the effect of crude oil price volatility on Nigeria economy and the national income. The study adopted ex-post facto research design. The study covered a period of 22years from 1995 to 2017. Descriptive and inferential (regression) statistics were adopted for the study. The result showed that oil price volatility has significant combined effect on Nigeria’s economy (Gross Domestic Product, Gross National Product and Per Capital Income) Adj.R2 of 0.432;0.449 &0.478, F-Statistics of 7.858, 9.488 ,& 9.238 and p-value 0.004, 0.002 & 0.002.Oil price volatility has no significant negative impact on Gross Domestic Product with β22 of -0.004,R2 of 0.023 t-statistics of -0.630 & p-value of 0.537;oil price volatility has no significant negative impact on Gross National Product with β22 of -0.005,R2of 0.027,t-statistics of -0.692 and p-value of 0.498;also oil price volatility has no significant negative impact on Per Capital Income with β22 of -0.004,R2 of 0.027,t-statistics of -0.688 & p-value of 0.500.The study concluded that oil price volatility affects national income and Nigeria economy significantly. The study recommended that Nigeria should adopt policies that will address negative oil price shocks so that the budgetary system and national income will not be affected.
Keywords: Exchange Rate, Gross Domestic Product, National Income, Nigeria economy, gross national product, oil price volatility
