UZUEGBU, Joshua Chibuzo
Department of Economics
College of Management Sciences
Michael Okpara University of Agriculture Umudike, Abia State, Nigeria
uzuegbu.chibuzo@mouau.edu.ng
ALUGBUO, Justin Chinweizu
Department of Economics
College of Management Sciences
Michael Okpara University of Agriculture, Umudike Abia State, Nigeria
jc.alugbuo@mouau.edu.ng
ABSTRACT
The study investigated the validity of prebisch-singer hypothesis in Nigeria’s oil sector for the period 1981
to 2021. The OLS estimation technique was used for estimation while E-views version 11 facilitated the
computing of results. Time series data were obtained from World Development Indicators (WDI) and
Central Bank of Nigeria Statistical Bulletin 2021. Since the Prebisch-Singer postulation is based on longrun relationship, the study analysis was based on long-run observed results. Results showed that there exist
52% goodness of fit between the dependent and independent variables. Economically, commodity terms of
trade and income terms of trade did not conform to a priori expectation at 5% level of significance, since
statistically, commodity terms of trade and income terms of trade at individual level had a negative
significant relationship with GDP of Nigeria implying that the oil sector international trade is not favorable
to the Nigerian economy. Based on this finding, the study recommended among others that the government
should ensure that domestic refineries should be functional and start producing at full capacity in order to
improve the strength of the Nigerian currency and to achieve a favorable balance of payment.
Keywords: Commodity terms of trade, income terms of trade, Prebisch-Singer Hypothesis, Gross
Domestic Product