Abstract
This study examines the effect of oil resource abundance and deficit finance on per capita GDP growth in selected oil-rich African countries between 1980 and 2017. We analyse panel data from Algeria, Angola, Egypt, Libya, and Nigeria using the dynamic heterogeneous panel approach. Results show that oil production positively enhances GDP growth in the panel, Algeria, Angola, Egypt, and Libya, except in Nigeria. Oil rents adversely affect growth in Algeria, Angola, Egypt, and Libya, while net oil export negatively affects GDP growth in the short- and long-run in Africa, Angola, Egypt, Libya, and Algeria, but positive in Nigeria. Lastly, deficit finance is growth-enhancing in Algeria and Egypt, but growth-reducing in Libya, Nigeria, and Angola. It is therefore essential for these countries to invest their oil largesse in boosting the productive base of their economies to lower fiscal deficits during periods of crude oil price uncertainties and boost GDP growth.
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