Unveiling the Impact of Illegal Oil Trading on Nigeria's Economy: A Regression Analysis Approach

Abstract

The study examines the intricate dynamics of illegal oil trading spanning from 1995 to 2017, shedding light on its implications for the Nigerian economy. Employing ordinary least square multiple regression analysis, the research uncovers a significant relationship between illegal oil trading and economic growth in Nigeria, unveiling the far-reaching consequences of this illicit activity. One of the noteworthy findings of the study is the negative coefficient associated with the volume of oil theft, aligning with the anticipated expectation. Furthermore, the inclusion of one-year lagged variables of the dependent variables proves to be statistically significant in contributing to the dependent variable, underscoring the persistence and cumulative impact of illegal oil trading over time. The study's overarching conclusion underscores the detrimental effects of illegal oil trading on the Nigerian economy, particularly within the study period. It highlights the urgent need for proactive measures to curb this illicit practice, emphasizing the pivotal role of law enforcement authorities in addressing this pressing issue. Among the recommendations put forth by the study, a key emphasis is placed on the imperative of instituting robust and effective sanctions against offenders. By imposing stringent penalties and enforcement mechanisms, authorities can deter individuals and entities engaged in illegal oil trading, thereby safeguarding the integrity of Nigeria's economy and fostering sustainable development. The study serves as a clarion call for concerted action to combat illegal oil trading, advocating for comprehensive strategies that combine legal measures, enforcement initiatives, and deterrent mechanisms to protect Nigeria's economic interests and promote a climate of transparency, accountability, and rule of law.