Arima Model of Crude Oil Exports In Nigeria
This work discusses the ARIMA model for crude oil export in Nigeria between January 1999 to December 2007. The relevance of this study lies in its ability to provide information on the possible point of dwindling proceeds from oil exports. The transformation suggested by data evaluation was applied to stabilize the variance. The ARIMA (1,1,1) model, with μ =1.9479, ∅ =-0.3019 ,and θ = 0.2915 fitted to the transformed series Wt = X 0.63 was found to be adequate for describing the pattern in the series. The forecast values for the next 12 months (i.e. for 2008) using this model indicates a high degree of disagreement with the actual values. This was attributed to changes in the circumstances under which the model was constructed. This indicates that the proceeds from oil exports may not be relied upon for too long because of such changes. It is therefore, suggested that efforts geared towards diversification of exports be increased and sustained.
Keywords: Oil exports, ARIMA model, transformation, forecasting, exports diversification