CENTRE FOR ENERGY, PETROLEUM AND MINERAL LAW AND POLICYSTATEMENT OF ORIGINALITY STUDENT I.D.: STUDENT NAME: PROGRAMME: MODULE CODE: TITLE OF THE RESEARCH PAPER: 090018338 AHMED ADAMU.

Msc Energy studies with specialization in Oil and Gas Economics.CP51009 (Petroleum Policy and Economics)

WHAT IS THE IMPACT OF OIL PRICE CHANGES ON THE MAJOR MACROECONOMIC VARIABLES IN NIGERIA?

ABSTRACT:

The force of Oil price fluctuation is enveloping these days as it nearly affects all aspect of economic activity. Therefore, it is important to identify the connection between Oil price changes and the Macro economy. Consequently this paper analysed the effects of oil price changes on the real macroeconomic activity in Nigeria. Empirical and theoretical analyses were employed in the analysis. The paper found evidence of some adverse implication of oil price changes on some major individual macro-economic variables. In particular, Oil price fluctuations was found to impeded the economic predictability and stability in Nigeria, as oil prices relate in one way or the other with all component of the macro-economy of the country. Economic diversification and fuel substitutes supported by a prudent and accountable political regime were suggested for the country to escape from the unfavourable implications of reliance on the erratic and depletable oil resource.

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TABLE OF CONTENTS

Page

ABBREVIATIONS......... 3 CHAPTER 1: INTRODUCTION........................................... 4 CHAPTER 2. Factors that lead to changes in oil prices................................................. 8 2.1. Demand and Supply Factor.............. 8 2.2. OPEC Influence....... 9 2.3. Speculation..................... 11 2.4. Other Factors.............. 13

CHAPTER 3. Oil Price changes and Macroeconomic variables: .................................14 3.1. Oil Price changes and Revenue............................................. 14 3.2. Oil Price changes and Government Expenditure................... 17 3.3. Oil Price changes and Inflation............................................. 19 3.4. Oil Price changes and Private Investment............................. 20 3.5. Oil Price changes and Balance of Payment........................... 21 3.6. Oil Price changes and GDP................................................... 23

CONCLUSION............................. 25 BIBLIOGRAPHY....... ..27

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LIST OF ABBREVIATIONS: ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES (OPEC) FOREING DIRECT INVESTMENT STATE OWNED COMAPANIES NIGERIA NATIONAL PETROLEUM CORPORATION BALANCE OF PAYMENT GROSS DOMESTIC PRODUCT IMPORTS EXPORTS (FDI) (SOCs) (NNPC) (BOP) (GDP) (M) (X)

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1. INTRODUCTION: Over the last several years, oil prices fluctuate significantly. In 2009, the average crude oil price was around US$53 and in the first quarter of 2010, it rose to the Average of US$70. Within this period and before, Crude oil prices had been fluctuating at least three times in every month.1 These frequent fluctuations affect the overall economic performance globally at least in the short term. This is because of the increase in worldwide consumption and reliance on oil. When the price of crude oil is high, the exporting countries experience increase in revenue which if manage well lead to economic growth, while importing countries typically undergo declining in economic growth. Despite the recent increase in oil prices which induce more revenue and economic growth to the exporting countries, the importing countries who are resource poor usually perform economically better than the majority of the resource rich countries, this is because the oil importing countries who lack the oil resource tend to invest on other sectors whose commodity prices do not fluctuate.History of Illinois Basin Posted Crude Oil prices (2010): History and analysis of crude oil prices, from WTRG Economics.1

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How much crude oil price change affects a country depends on the share of the Oil revenue in the National Income, the degree of dependence on imported Oil and the ability of final consumers to substitute or reduce the consumption of Oil. Logically, the Larger and longer the Oil price increase the bigger the macro-economic impact.2 For net oil exporting countries, an increase in oil price generally lead to direct increase in the real National Income, though some part of this gain will be utilized to offset the losses possible to occur when the trading partners demand for import reduces due to economic recession. In the case of net importing countries, an increase in the crude oil prices lead to inflation, increase in input cost, reduction in tax revenues, and increase in budget deficit because of the rigidities in government spending which subsequently leads to increase in interest rate due to resistance to real decline in wages. These effects are more severe when the price increase is more sudden and more pronounced.

2

Majidi, M., (2006), Impact of Oil on International economy, International Economics course, Centre for Science and Innovation Studies.

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They are also magnified by the impact of higher prices on consumer and business confidence. 3 Nigeria, having relied more on crude oil export earnings which account for more than 90 per cent of its total export earnings and also constitute up to 70 per cent of the government revenues in its annual budget,4 is becoming more vulnerable to negative implications due to the frequent changes of the oil prices at international market. Therefore, it is imperative to analyse and understand the effects of these changes on the country s macro-economy with a view to have effective policy measures in addressing and preventing the reoccurrence of any severe implications from oil price fluctuations in the future. The discussion was presented base on empirical and theoretical analysis of the impact of oil price changes on some major individual macro-economic variables in the country. The paper is categorised into chapters. The Introduction preceded Chapter two which discussed the factors that lead to changes in oilWakeford, J. (2006): The impact of oil price Shocks on the South African Macroeconomy: History and Prospects, in Accelerated and Shared Growth in South Africa: Determinants, constraints and opportunities. 18-20 October. 4 Akpan, E. O., (2009), Oil price shocks and Nigeria s Macro economy. Department of Economics, University of Ibadan, Nigeria.3

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prices. It was followed by chapter three which dwelled on the impact of oil prices changes on some major macro-economic variables. Finally Conclusion was followed by Bibliography.

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CHAPTER 2

FACTORS THAT LEAD TO CHANGES IN OIL PRICES: The most common knowledge is that oil price fluctuations are basically determined by oil supply. This believes could be based on the fact that much of the oil production is influenced by a cartel known as Organization of the Petroleum Exporting Countries (OPEC). Other causes could be responsible for the oil price changes, these factors are discussed below: 2.1 DEMAND AND SUPPLY FACTOR: Many oil supply disruption were associated with wide increases in Oil prices for example the oil embargo of 1973 and the Iranian revolution of 1979 were apparently believed to cause large increases in prices. Therefore, as oil supply declines the prices would increase and vice versa. Global demand driven by economic activity and precautionary demand to guard against future emergencies also trigger oil price fluctuations. Kilian (2007) discussed these factors in the context of some prominent oil price spikes, for example he found that the price8

increase in 1979-80 were basically caused by increases in precautionary demand, while oil production declines had a relative impact, likewise for the Persian Gulf war period. In recent years most of the price increases can be attributed to increased global demand from countries like China and India. Kilian s result provides evidence that increases in the demand for oil is the main contributor to fluctuations in the real price of oil. However, this does not mean that disruptions in oil supply have no effect. Changes in supply can indirectly affect prices by raising precautionary demand especially when the agents believe that future disruptions may escalate. 5 2.2 OPEC INFLUENCE: Due to the status and significance of OPEC in the oil market, it is not surprising if OPEC is said to receive all or part of the blame for oil price volatility. Similarly, it might not be necessary to explain the volatility in terms of OPEC s price fixing, because OPEC has abandoned fixing the reference price since 1987 to adopt a system in which OPEC sets production quotas based on its appraisal of the market s call on OPEC5

Kilian, L. (2007), Not all oil prices shocks are alike, disentangling demand and supply shocks in the crude oil market. University of Michigan and CEPR.

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supply. Therefore, prices of oil changes based on how well OPEC does this calculus. The only purpose of the process of adjusting its production quotas is to influence price movement. However, it is difficult for the OPEC to predict the direction of the market adequately due to uncertainties of demand and supply, lack of reliable and timely data about consumption, production and inventory levels as well as unreliability of short term forecasts. Similarly, Due to the structure of the OPEC, sometimes it will be very difficult to implement the agreed policy even if OPEC predicts the direction of the market correctly. This is because OPEC is a coalition of a heterogeneous group of nations facing different economic, social and political challenges and no incentive to share information. Moreover, OPEC do not have monitoring system to supervise production and shipments and more significantly no punishment mechanism to discourage cheaters. This arrangement in which agreements are reached at a narrow time and conclude on the basis of concession instead of optimizing decisions

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leads to significant uncertainty about supply conditions, contributing to oil price volatility. 6 Therefore, it is relevant to note that implementing output adjustment is challenging, that is to say OPEC s response is asymmetric to global demand conditions. Moreover, anticipations of output cuts encourage speculation about OPEC s ability to adhere to them. These expectations can lead to swings in net speculative positions and reversal of such positions if the cut is less than expected or does not materialized.7 Due to the slowness of the OPEC response to global increase in demand for oil, further volatility could be enhancing by undersupplying the market. The slowness of the OPEC s response to upward trend could be the imperfect information environment. 2.3 SPECULATIONS: Expectations on any decision of OPEC in its meetings encourage oil price change; there are some evidences that suggest volatility drifts

6

Hyndman, (2004), Status Quo Effects in Bargaining: An Empirical Analysis of OPEC . For an interesting theoretical discussion on asymmetric ability of OPEC to reach agreements in different market conditions.7

Weston, P., and Christiansen, M. R., (2003), OPEC: Market Stabilizer or Disruptive Influence?

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upwards as OPEC meetings approach.8 This does not necessarily mean that OPEC is causing the volatility and may merely reflect market agents who are on the upside of a bet about what it might or might not do. However, OPEC by getting it wrong sometimes, such as in 1977-78 can induce price instability. This is related to lack of transparency of OPEC and complexity in its decisions and implementations as discussed above. Subsequently, OPEC has now since 1999 include the following things in its policy consideration: level of oil and product stocks, market speculation, basket price range, geographical factors, supply and demand situation and US$ exchange rate. 9 the increase in the frequency of OPEC meetings and the increase in the frequency of quota adjustment in recent years have also constituted to an increase in speculative activity. 10

8

Horan et al (2004), Implied Volatility of Oil Futures Options Surrounding OPEC Meetings, The Energy Journal, 2004, Issue 3, pp. 103-125. 9 Garcia, P A M (2005), OPEC in the 21st Century: What has Changed and What Have We Learned ?, Oxford Energy Forum, Issue 60, Oxford: Oxford Institute for Energy Studies.10

Supra Note 6, at 10.

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2.4 OTHER FACTORS: In order to understand clearly the causes of oil price volatility, the consideration has to go beyond OPEC policies and actions. Analysis must be expanded to include some features that have emerged in the oil market and the oil industry in recent years. Some of these factors include gradual erosion of OPEC spare capacity, the shift in the strategy of inventory management by international oil companies, the increasing importance of the oil futures market in the current oil pricing system as well as deterioration in the quality and timeliness of data on oil related factors.11

11

Supra Note 6, at 10.

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CHAPTER 3

OIL PRICE CHANGES AND MACRO-ECONOMIC VARIABLES: There are different ways which the oil exporting countries can be affected economically due to change in oil prices. This chapter analyses the effects of oil price changes on the Nigerian economy under some basic macro-economic variables, namely: Revenue, Government Expenditure, Private Investment, Inflation, GDP and Balance of Payment. 3.1 OIL PRICE CHANGE AND REVENUE: Sources of income differs from one country to another, most of the developed countries, income tax is the main source of government revenue, but in most of the oil exporting developing countries like Nigeria, oil revenue is the main source of the government income. However, due to over reliance on oil revenues, Nigeria is vulnerable to revenue fluctuations due to the volatility of the oil prices at

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international market.12 Because of the absence of stable flow of revenue from the government, the volatility in oil prices works to be closely equally proportionate to the revenue causing revenue to increase and decrease almost in the exact manner as oil price,13 leading to windfall gain when the oil price is high and lack of sufficient revenue when the price came down. Therefore, price volatility hardly becomes beneficial, because higher prices do little to encourage capacity increases because suppliers are unable to do so due to some constraints beyond their control like a depleted natural resource. Thus, windfall gains are limited to available capacity. Similarly, if the price decreases it does not alter the regularity of supply in the short run which will result to decline in revenue. This is because the oil is a publicly traded commodity and its price is determined by the interaction of invisible hands of demand and supply globally. Due to the unsteadiness of the oil prices, it will be difficult to accurately project revenue. Realized revenues frequently diverge significantly12

Ukwu, U. I., Obi, A. W., & Ukeje, S., (2003). Managing Macro-economic volatility in Nigeria. Nigeria: African Institute for applied Economics. 13 Ifeka, N. S., (2007). Derivatives and risk management in the Oil and Gas Industry. What is its role in managing price risks and its implications on the Energy Markets? . Dissertation submitted to the University of Dundee for the degree of Masters of Science, Scotland, UK.

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from budget projections as huge revenue swings hampers a sound budget (Ahmad, and Singh, 2003). Subsequently, it will be difficult to manage the Nigerian economy due to the planning and budgeting implications. Therefore, it is economically burdensome on oil exporting countries that rely on oil revenues as any short falls in the price will reduce the amount of revenue the government expect to get in order to tackle its expenditures. This may force the government if necessary to resort to borrowing from international financial institutions to finances its budgets otherwise most of the public projects will have to be either stopped or remain unfinished. For instance, in 2008, Nigeria projected total revenue of N1.986 trillion out of which 80 per cent was expected from oil sales at an estimated crude oil price of US$53.83 per barrel, later in the year the barrel prices almost doubled the estimated price which yield lots of windfall revenues from oil sales.14 In contrast, in 2009 the expected benchmark crude oil prices was US$45, but in the first three months of the year the crude oil price went below US$45, thereby causing adverse effect to

14

Site administrator, (2007). http://www.polity.org.za Nigeria: Yar adua: 2008 budget speech (8 November).

th

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the acquisition of the expected revenue.15 Therefore, the oil price and Nigerian government revenue has a positive relationship. 3.2 OIL PRICE CHANGE AND GOVERNMNET EXPENDITURE: Government expenditure also reacts considerably to oil price changes in the same way with Revenue. Government s spending generates from its revenue, as such the higher the revenue the higher the spending. Due to over reliance on oil as a main source of revenue in Nigeria, volatility of oil prices forces serious disruptive effects on the government spending. As mentioned by Humphreys et al (2007) volatility in receipts often translates into volatility in expenditure this can be proved by the fact that spending and investment tend to be high if the oil prices are high while the reverse is the case when oil prices are low. Robert Weiner (2000) stated that sudden decline in government revenues make the government incapable of fulfilling its commitments and finishing its investment projects in time .

15

Editorial, Daily independent (2008). Nigeria: 2009 Federal Government Budget. http://www.allafrica.com, 8 December.

th

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More

consequences

arise

when

separating

the

government

expenditure into segments or pledges, it is clear that some of the pledges can be removed; others cause a greater problem if removed because they are crucial. Oil price change tends to have an intense influence on development expenditure than on administrative expenditure. In other words, when the oil price is low, administrative expenditure can be easily maintained, but development expenditure such as construction of roads, provision of social amenities etc tend to be cut. The other component of government expenditure is consumption and investment expenditure, Consumption also reflects income.16 An abrupt increase in prices of strategic commodities in the country brings about detrimental consequences for the economy. High oil prices in Nigeria bring about high income resulting to increase in public consumption primarily evidenced in high wages, salaries, transfers and subsidies which cannot be maintained when the reverse is the case. On the other hand, investment expenditure reacts to oil price in the same

16

Turto2u, inflationa and oil prices: http://www.tutor2u.net/economics/content/topics/inflation/oil_prices.htm

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manner with consumption expenditure, the higher the oil prices (more revenues) the higher the investment and vice versa. The difference is that when the oil price is low, the Nigerian government reduce the investment expenditure in favour of the consumption expenditure to keep the ministries and institutions moving.17 3.3 OIL PRICE CHANGE AND INFLATION: As an oil dependent country, Nigeria experiences frequent increase in the prices of consumer goods because of the frequent increase of the oil prices. An increase in the price of petrol litre will make the market suppliers to promptly increase the prices of commodities without letting the oil price change to reflect in their cost of supply, and commodity prices do not usually came down when the petrol litre price came down, which forces unnecessary inflation. Thus general price level and crude oil prices tend to have positive relationship in the country. Though increase in the oil price tend to impose a severe economic implication in terms of inflation but decrease in the oil price do little or no impact on the prices of consumer goods.17

Ahmad, E., and Singh, R., (2003). Political Economy of oil revenue sharing in a developing country: illustrations from Nigeria. Washington: IMF working Paper WP/03/06.

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This kind of trend has been technically observed globally. In theory, the casual relationship is obvious in the second half of 2000 and 2008; an increase in oil prices causes an inward shift in short run aggregate supply and puts upward pressure on the price level. Therefore a sharp increase in the crude oil price lead to an exogenous inflationary shock and the consequences will be larger especially for a large scale importer of oil which has many industries that use oil as a basic input in the production process.18 As mentioned earlier, an increase in oil prices bring about increase in the government expenditure which constitute more of administrative expenditures accruing to more money possession in the hands of citizens which trigger sky rocketing of general price level. 3.4 OIL PRICE CHANGE AND PRIVATE INVESTMENT: Oil price changes have an adverse effect on both Local and Foreign Direct Investment (FDI); it tends to have the same manner of relationship with investments as with government revenue and expenditure. An increase in the oil prices lead to an increase in the level18

Supra Note 16, at 17.

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of investment and vice versa, for instance in 1986, investments dropped rapidly in Nigeria due to decrease in the oil prices.19 The factor that influences the behaviours of investors is the future value of their investment and this has raised the concern of volatility. The cash flows which are discounted to present values in determining the project s viability is significant to investors and setting up the cash flows becomes difficult in the presence of oil price volatility, because it is difficult to project the level at which the oil price rise or fall. Price volatility as mentioned earlier lead to unpredictability in the revenue and expenditure, as a result, the following risks are imposed; Volatility in exchange rate, unsteadiness of profits, higher risks and unstable economy, thereby making an investment in the country less attractive. 3.5 OIL PRICE CHANGE AND BALANCE OF PAYMENT: Balance of payment (BOP) is an accounting record of all monetary transactions between a country and the rest of the world; these transactions include payments from the country s exports and imports of goods and services, financial capital as well as financial transfers. It19

Supra Note 17, at 18.

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includes remitted profits by overseas-owned companies and interest repayment on loans and the capital and financial account. To relate BOP with oil price changes, current account which is a BOP component and which is the value of goods exported minus the value of imported goods is considered as a measure.20 When the value of exported goods and services is higher than the imported goods and services, the country is considered to have a surplus. When the value of exported goods and services are lower than the imported goods and services, the country is said to encounter deficit. Everything being equal, an increase in the oil price will increase the value of exports for oil exporting countries and increase the value of imports for oil importing countries. When oil price falls, the value of exports falls over imports resulting to a goods deficit. The level of BOP movement is measured relative to price by using Terms of Trade index. The Terms of Trade index is the index of export prices divided by an index of import prices.21 EXPORT PRICE INDEX TERMS OF TRADE=20 21

IMPORT PRICE INDEX

X 100

Sloman, J., (2004). Economics. Peguin. Pp 516-517 Addiso, D., (2008). Managing extreme volatility for long term growth. In collier, P., Soludo, C. C., and Patillo, C. (eds). Economic policy options for a prosperous Nigeria. UK: Palgrane Mc-millian.

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The higher the terms of trade above 100 i.e. the price of exports has increase relative to the price of imports which imply favourable and improved terms of trade, the bigger the BOP. Terms of Trade tend to fluctuate in Nigeria due to the volatility of oil prices. A decrease in oil prices lead to fall in Terms of Trade below 100, BOP is unfavourable and deteriorating at this condition. Terms of trade of Nigeria as an oil exporting country tend to be so volatile due to the large ratio of oil exports to total exports as compared to a more diversified Imports (M) portfolio. Therefore, changes in price of oil causes a large change in the overall value of exports (X), because oil constitute larger portion of the total exports

3.6 OIL PRICE CHANGE AND GDP:Hamilton (1983) Majority of the economic recessions was due to rise in the oil prices in the oil importing countries. Economies of oil exporting countries tend to be more volatile as shown in their Gross Domestic Products (GDPs) compare to non-oil commodities exporting countries whose prices are stable and predictable. Hooker (1996) found that for the 1948-1972 pre-embargo period, a 10 per cent oil price increase reduced GDP by 0.6 per cent in United State of America. However,23

David B. Et al (1999) stated that Nigeria experienced a large, temporary trade windfall beginning in 1974 and ending 1981, the estimated value of the windfall during these years was almost double annual GDP just prior to the boom, therefore, increase in the oil price help improve GDP, this is because Nigeria, is an exporting country, but during these period, the windfall revenues would have been reserved for the future recessions to mitigate the difficulties. An increase in oil price leads to rise in GDP of Nigeria due to increase in revenues, expenditure and investment. Similarly, decrease in oil prices lead to low GDP due to fall in revenues, expenditure and investment. Revenues, expenditure, investment and Balance of Payments fluctuate in the same manner with oil price fluctuations. An increase in one of the component of aggregate demand causes GDP to increase.

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CONCLUSION:Fluctuation of oil prices is a common phenomenon, its causes are familiar, but its implications and impact on macro-economy are seldom discussed. Divergent reasons could trigger the fluctuations but similar implications on the economy were observed especially in developing countries. A resource rich developing country like Nigeria faces economic fluctuations as the price of the pervasive and income generating fuel (i.e. oil) tends to be volatile. In Nigeria huge oil revenue did not reflect on the economy and the standard of living of the citizens, as the fluctuations of oil prices imposes an adverse effect on individual macro-economic variables in the country. Subsequently, the paper analysed how the oil prices impacted on some major macro -economic variables in order to help provide policy recommendations and information for appropriate economic measures and adjustments. Government revenue and expenditure, inflation, private investment, GDP and exports was observed to have a positive correlation with oil prices unlike imports that tend to have negative relationship with oil prices in the country. This implies that dependence on oil whose prices are volatile as a major export commodity and source of income to the25

government is risky to the economy. To address the economic implication of oil price volatility, other sectors of the economy must be revived, alternative fuels developed, energy conservation enhanced, and a prudent, transparent and committed political regime must be provided to support any economic reform and development in the country. Further extensive studies are recommended on the relationship of oil prices with each macroeconomic variable using a bigger sample and other econometric approaches that could generate similar findings.

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BIBLIOGRAPHY: BOOKS:Addiso, D., (2008). Managing extreme volatility for long term growth. In collier, P., Soludo, C. C., and Patillo, C. (eds). Economic policy options for a prosperous Nigeria. UK: Palgrane Mc-millian.

David Bevan, et al, (1999), The political Economy of Poverty, Equity and Growth, Nigeria and Indonesia, Oxford University Press, New York, P46. Sloman, J., (2004). Economics. Pp 516-517. ISBN: 978-0-582-84325-7 Peguin, Longman Group.

ARTICLES:Ahmad, E., and Singh, R., (2003). Political Economy of oil revenue sharing in a developing country: illustrations from Nigeria. Washington: IMF working Paper WP/03/06.

Akpan, E. O., (2009), Oil price shocks and Nigerias Macro economy. Department of Economics, University of Ibadan, Nigeria.

Garcia, P A M (2005), OPEC in the 21st Century: What has Changed and What Have We Learned ?, Oxford Energy Forum, Issue 60, Oxford: Oxford Institute for Energy Studies.

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History of Illinois Basin Posted Crude Oil prices (2010): History and analysis of crude oil prices, from WTRG Economics.

Hooker, M., (1996), What happened to the oil price-macro-economy relationship?, journal of monetary Economics, 38, 195-213.

Horan et al (2004), Implied Volatility of Oil Futures Options Surrounding OPEC Meetings, The Energy Journal, 2004, Issue 3, pp. 103-125.

Hyndman, (2004), Status Quo Effects in Bargaining: An Empirical Analysis of OPEC. For an interesting theoretical discussion on asymmetric ability of OPEC to reach agreements in different market conditions.

Ifeka, N. S., (2007). Derivatives and risk management in the Oil and Gas Industry. What is its role in managing price risks and its implications on the Energy Markets? . Dissertation submitted to the University of Dundee for the degree of Masters of Science, Scotland, UK.

Kilian, L. (2007), Not all oil prices shocks are alike, disentangling demand and supply shocks in the crude oil market. University of Michigan and CEPR.

Majidi, M., (2006), Impact of Oil on International economy, International Economics course, Centre for Science and Innovation Studies.

Robert, J. W., (2000), Managing Petroleum Fiscal Dependence, the Centre for Latin America Issues.28

Ukwu, U. I., Obi, A. W., & Ukeje, S., (2003). Managing Macroeconomic volatility in Nigeria. Nigeria: African Institute for applied Economics.

Wakeford, J. (2006): The impact of oil price Shocks on the South African Macroeconomy: History and Prospects, in Accelerated and Shared Growth in South Africa: Determinants, constraints and opportunities. 18-20 October.

Weston, P., and Christiansen, M. R., (2003), OPEC: Market Stabilizer or Disruptive Influence?

OTHERS:Editorial, Daily independent (2008). Nigeria: 2009 Federal Government Budget. http://www.allafrica.com, 8th December.

Site administrator, (2007). http://www.polity.org.za Nigeria: Yaradua: 2008 budget speech (8th November).

Turto2u, inflationary and oil prices: http://www.tutor2u.net/economics/content/topics/inflation/oil_prices.ht m

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