From Reserves to Revenue: The Economic Dynamics of Nigeria's Natural Gas Export from 1999 - 2022

Abstract Nigeria's position as a major participant in the global energy market, especially via its natural gas exports, is crucial in this age of energy transition. Nigeria's enormous natural gas reserves have become an important part of the global gradual shift from conventional fossil fuels towards greener energy sources, providing a cleaner substitute for coal and oil. This study examined the economic impact of Nigeria's natural gas exports from 1999 to 2022, utilizing an Autoregressive Distributed Lag (ARDL) model to provide a detailed analysis. The methodology includes descriptive statistics, the Augmented Dickey-Fuller unit root test, the ARDL bounds test for co-integration, the Granger causality test, and diagnostic tests. The results suggested that natural gas exports have a significant and positive effect on Nigeria's economic growth at a 1% level of significance. However, the impact of crude oil exports is positive but not statistically significant. The analysis revealed that foreign direct investment exerts a noteworthy and favourable impact, with a significance level of 10%. Conversely, there exists an inverse correlation between natural gas prices and economic growth in Nigeria in the long term. The model's robustness and fitness are verified by diagnostic tests. In light of the substantial and positive long-term effects of natural gas exports on Nigeria's gross domestic product, it is recommended that natural gas exports be stimulated through increased infrastructure investment, enhanced export facilities, and the formation of favourable trade agreements. Moreover, the substantial positive impact of foreign direct investment on economic growth underscores the imperative for the Nigerian government to establish a more attractive investment climate through the provision of incentives to foreign investors, political stability, and enhanced legal frameworks.