Recalibrating Ease of Doing Business and Maximizing Productivity and Profitability in Nigeria’s Energy Sector in VUCA Times
Keywords:
Ease of Doing Business, VUCA, Energy Sector, ProfitabilityAbstract
This study examines the recalibration of ease of doing business and its implications for maximizing productivity and profitability in Nigeria’s energy sector within the context of VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) conditions. The study is motivated by the persistent underperformance of the sector despite abundant resource endowments and its critical role in national development, while the objectives are to evaluate the impact of ease of doing business, operational efficiency, and VUCA conditions on profitability, and to determine how their interactions influence sector performance. The study adopts a quantitative research design, using time series data from 2000 to 2023, and employs the ARCH–GARCH estimation technique to account for volatility clustering and dynamic relationships among the variables. The stationarity tests confirm that all variables are integrated of order one, thereby justifying further econometric analysis. The findings reveal that operational efficiency has a significant negative effect on profitability, due to high production costs and inefficiencies. At the same time, ease of doing business exerts a positive but insignificant effect, reflecting weak institutional implementation, and VUCA conditions have a positive and significant impact, suggesting that firms exploit volatility for profit opportunities. However, the interaction between ease of doing business and VUCA is negative and significant, indicating that weak institutional frameworks constrain the benefits of operating in volatile environments. The model is found to be stable and reliable based on diagnostic and post-estimation tests. The study concludes that improving institutional quality, enhancing operational efficiency, and adopting adaptive strategies are essential for repositioning Nigeria's energy sector for sustainable growth, and recommends policy reforms to strengthen regulatory frameworks, improve infrastructure, enhance transparency, and attract foreign investment.
References
1. Adelegan, O. J. (2007). Infrastructure and economic growth in Nigeria. African Development Review, 19(3), 465–491.
2. Agbugba, I. K. (2023). Energy sector productivity and economic growth in Nigeria. International Journal of Energy Economics and Policy, 13(2), 45–56.
3. Akinlo, A. E. (2012). How important is oil in Nigeria’s economic growth? Journal of Sustainable Development, 5(4), 165–179.
4. Apergis, N., & Payne, J. E. (2010). Energy consumption and growth in South America: Evidence from panel cointegration analysis. Energy Economics, 32(6), 1421–1426.
5. Ayadi, F. S., & Ayadi, F. O. (2008). The impact of oil production on Nigeria’s economic growth. Journal of Energy and Development, 33(2), 195–210.
6. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108
7. Bennett, N., & Lemoine, G. J. (2014). What VUCA really means for you. Harvard Business Review, 92(1/2), 27–42.
8. Burns, T., & Stalker, G. M. (1961). The management of innovation. Tavistock Publications.
9. Central Bank of Nigeria. (2023). Statistical bulletin. https://www.cbn.gov.ng
10. Ehinomen, C., & Adeleke, A. (2012). Oil exploration and environmental degradation in the Niger Delta region of Nigeria. Journal of Environmental Science and Engineering, 1(6), 567–575.
11. Ekpo, A. H. (2014). Public investment and economic growth in Nigeria: An empirical investigation. Journal of Economic and Sustainable Development, 5(12), 123–134.
12. Energy Information Administration. (2023). International energy statistics. https://www.eia.gov
13. Ezeani, E. O. (2012). Deregulation policy in Nigeria’s downstream oil sector: Challenges and prospects. Journal of Economics and Sustainable Development, 3(7), 56–62.
14. Gbadebo, O. O., & Okonkwo, C. (2009). Does energy consumption contribute to economic performance? Evidence from Nigeria. Journal of Economics and International Finance, 1(2), 44–58.
15. Hamilton, J. D. (2009). Causes and consequences of the oil shock of 2007–08. Brookings Papers on Economic Activity, 40(1), 215–261.
16. International Energy Agency. (2022). Africa energy outlook 2022. https://www.iea.org
17. Iyoha, M. A., & Oriakhi, D. E. (2002). Explaining African economic growth performance: The case of Nigeria. African Economic Research Consortium.
18. KPMG. (2021). Oil and gas in Nigeria: Industry outlook. https://home.kpmg/ng
19. Mordi, C. N. O., Englama, A., & Adebusuyi, B. (2010). The changing structure of the Nigerian economy. Central Bank of Nigeria.
20. National Bureau of Statistics. (2023). Nigerian gross domestic product report. https://www.nigerianstat.gov.ng
21. Nigerian National Petroleum Company Limited. (2023). Annual statistical bulletin. https://www.nnpcgroup.com
22. North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press.
23. Nwanna, I. O., & Chinwudu, E. (2016). Financial liberalization and economic growth in Nigeria. Journal of Economics and Finance, 7(2), 11–18.
24. Odularu, G. O. (2008). Crude oil and the Nigerian economic performance. Oil and Gas Business Journal, 1–29.
25. Okonkwo, O. N., & Egbunike, C. F. (2016). Financial development and economic growth in Nigeria. Journal of Policy and Development Studies, 10(2), 45–56.
26. Olayungbo, D. O. (2012). Effects of global oil price on exchange rate, trade balance and reserves in Nigeria. Journal of Economic International Finance, 4(4), 95–103.
27. Onafowora, O. A., & Owoye, O. (2008). Oil prices and real exchange rate volatility in Nigeria. Energy Economics, 30(2), 850–867.
28. Onyeiwu, S. (2012). Monetary policy and economic growth of Nigeria. Journal of Economics and Sustainable Development, 3(7), 62–70.
29. Organisation of the Petroleum Exporting Countries. (2023). Annual statistical bulletin. https://www.opec.org
30. Organization for Economic Cooperation and Development (OECD). (2020). OECD business climate indicators. https://www.oecd.org
31. PwC. (2022). Global energy transformation: Nigeria perspective. https://www.pwc.com/ng
32. Sambo, A. S. (2009). Strategic developments in renewable energy in Nigeria. International Association for Energy Economics, 15–19.
33. Sanni, M. R. (2015). Corporate governance and financial performance of listed oil and gas firms in Nigeria. Journal of Accounting and Taxation, 7(2), 34–45.
34. Seplat Energy Plc. (2023). Annual report and accounts. https://www.seplatenergy.com
35. Solow, R. M. (1956). A contribution to the Theory of economic growth. Quarterly Journal of Economics, 70(1), 65–94.
36. TotalEnergies Marketing Nigeria Plc. (2023). Annual report and financial statements.
37. Udoh, E., & Ogbuagu, U. R. (2012). Financial sector development and industrial production in Nigeria. Journal of Applied Finance and Banking, 2(4), 49–68.
38. United Nations Development Programme (UNDP). (2022). Human development report: Nigeria. https://www.undp.org
39. World Bank. (2020). Doing business 2020: Comparing business regulation in 190 economies. World Bank Publications. https://doi.org/10.1596/978-1-4648-1440-2
40. World Bank. (2023). World development indicators. https://data.worldbank.org
41. World Economic Forum. (2022). Global competitiveness report. https://www.weforum.org
