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Abstract: This study examines the dynamic relationship between oil revenue, government spending and economic growth in Nigeria. Since the discovery of oil, oil proceeds have dominated the country's federation account and have improved public spending. In this paper, we analyse if the huge government spending has improved the rate of economic growth. To do this, the multivariate vector autoregression framework with special attention to Generalised Impulse Response Function is adopted in analysing the annual data of oil revenue, total government expenditure and real Gross Domestic Product from 1980 to 2015. We find evidence that oil receipts remain the major route which public spending is financed and the fundamental source for growth. Hence, there is need for the government to diversify the sources of foreign exchange inflow of the country. The diversification of the economy is required to insulate it from external shocks. It is recommended for Nigeria to explore ways of reviving its huge agricultural potential which has been neglected since the discovery of oil in addition to exploring its rich untapped solid minerals deposit in order to promote diversification of the economy away from a mono cultural product base. [ABSTRACT FROM AUTHOR]

The passage into law of the Nigerian local content bill is one of the significant developments for domesticating the oil and gas industry through local value additions to the local economy. The bill received presidential assent on 22 April 2010 and created a law to provide for the development of indigenous content in the Nigerian oil and gas industry. The law also establishes the Nigerian Content Monitoring Board (board), which is charged with the responsibility to manage the coordination, monitoring and implementation of the local content law. Previous acts of the government had made feeble attempts at developing a local content framework for the industry and the fanfare associated with the recent enactment into law of the Nigerian local content bill very understandable. Nigeria is the world's eighth biggest oil exporter and relies on crude as its main foreign exchange earner. The industry accounts for over 40 per cent of Nigeria's gross domestic product and is associated with over a billion dollars worth of investments annually. There is a marked absence of indigenous players involved in these transactions, where about 90 per cent of goods and services used in the industry are imported from overseas. The local content law seeks to increase indigenous participation by prescribing minimum thresholds for the use of local services and to promote the employment of Nigerian staff in the industry. In this article, the writer makes a succinct analysis of the provisions of the Nigerian Local Content Act and argues that an antidote has been found for local participation in the vibrant Nigerian oil and gas sector. The writer concludes that, similar to Saudi Arabia, Venezuela and Kuwait, the local content law will go a long way in empowering indigenous oil and gas companies and assist Nigeria in developing the technical capacity for the industry. [ABSTRACT FROM AUTHOR]