Oil-producing African Countries Research Articles

The asymmetric effect of oil price on ecological footprint: evidence from oil-producing African countries

This study investigates the asymmetric impact of oil price (OP) on the ecological footprint (EF) in the major oil-producing African countries over the period 1988–2018. Results from the dynamic seemingly unrelated regression (DSUR) and the countrywise FMOLS regressions establish the asymmetric impact of OP on EF in the countries. Both GDP per capita and non-renewable energy (NRE) consumption are also affirmed as drivers of environmental degradation, while renewable energy consumption is found to be a promoter of environmental sustainability. Furthermore, a unidirectional causal relationship is found from OP to EF, GDP and NRE, while feedback is reported between EF and GDP. Therefore, the study proposes the need for diversification of the energy mix in these countries through the formulation of policies that would drive renewable energy usage without slowing down growth.

The production and consumption of oil in Africa: The environmental implications

In this paper, we examine the role of crude oil production and domestic oil consumption on the environmental quality in Africa. To achieve this objective, we employ feasible generalized least square (FGLS), fixed effect with Driscoll-Kraay standard errors (FE-DSE), and fully modified ordinary least square (FMOLS) on 4 top economies and oil-producing African countries between 1990 and 2018. Consistent with the positive environmental externality theory, we found that crude oil production improves the environmental quality in the long-run and short-run. On the contrary, domestic oil consumption negatively affects the environment, only in the short-run. Furthermore, we found that environmental treaties strongly influence the impact of oil production and consumption on environmental quality. Therefore, we suggested that renewable energy sources should be embraced by promoting investment in renewable energy.

Retrospecting on resource abundance in leading oil-producing African countries: how valid is the environmental Kuznets curve (EKC) hypothesis in a sectoral composition framework?

Policymakers and authorities in Africa are often concerned about economic growth and stability owing to the long history of socioeconomic problems that have bedeviled the continent for years. However, increasing environmental degradation challenges in recent times beckons for adequate attention considering Africa's vulnerability to climate change and environmental disasters. Thus, the current study examines the illustrious environmental Kuznets curve (EKC) hypothesis in a sectoral composition framework of fossil resources abundance among leading oil-producing African economies, including Algeria, Nigeria, Angola, and Egypt, using a combination of quantile regression (QR) approach and dynamic ordinary least square (DOLS) for data between 1995 and 2016. Based on the empirical results from the study, three main factors significantly increase environmental pollution through CO2 emissions among the countries, namely: fossil energy consumption, income levels, and the shares of the manufacturing sector in the total gross domestic product (GDP). While income growth exacerbates pollution, the negative impacts of the income square were only significant at the lower and mid quantiles of the understudied periods in the QR estimates. Thus, the EKC hypothesis was not convincingly upheld for the countries as its validity demonstrates significant quantile effects. Furthermore, the tripartite causality nexus among real income, resource rent, and share of the service sector in GDP, which is unobserved in the share of the manufacturing sector, reflect the infamous Dutch disease argument among the resource-dependent countries. Hence, to promote environmental sustainability and address resource dependency toward the actualization of SDGs (1, 8, 12, and 13), the study recommends energy portfolios diversification alongside economic diversification.

Sustainable Development and Crude Oil Revenue: A Case of Selected Crude Oil-Producing African Countries.

This study investigated the relationship between sustainable development and crude oil revenue (COR) in selected oil-producing African countries from 1992–2017 using the Pooled Mean Group (PMG) estimators on panel autoregressive distributed lag model (ARDL). Sustainable development was measured with the Human Development Index (HDI). This study was significant for Africa to break away from fiscal over-dependence on natural resource revenue, especially crude oil due to its high volatility and to correct porous institutional outlook. The a priori expectation is that crude oil revenue will tank so much that many countries will record negative positions and might not be to meet fiscal demands in the long run if the situation is protracted. Empirical results revealed that there was no long-term relationship between COR and sustainable development. In other words, the results suggest that any changes to COR have a potential negative effect on sustainable development in the selected countries. This implies over-reliance on COR will impact the economies negatively in the long run. This finding, therefore, requires an immediate fiscal intervention on spending on sustainable development drivers such as education, health, agriculture cum adoption diversification policy, and veritable supply-side policies that could avert the possibility of these negative effects and to correct traits of ineffective public institution. The absence of such policy interventions in these countries seems to be related to ineffective public institution and bad governance, culminating from poor, ineffective, and inefficient implementation.

Is Oil Rent a Curse for Health in Africa?

Aims/ Objectives: To determine whether oil rent is a curse for the health of populations in Africa.Study Design: Cross-sectional study.Place and Duration of Study: Oil-producing African countries over the period 2000-2015.Methodology: Using the Random effects (RE) and the Two Stages Least Square (2SLS) estimators on a sample of 18 Oil-producing African countries.Results: The results show that oil rent has a negative effect on life expentancy.Conclusion: The fact that oil-producing African countries have a source of revenue that does not depend on taxation, means that the governments of these countries do not make health an important part of public policy.

Relationship between greenhouse gas emission, energy consumption, and economic growth: evidence from some selected oil-producing African countries

This paper investigates the relationship between greenhouse gas emissions, energy consumption, and output growth among African OPEC countries (Libya, Nigeria, Angola, Algeria, Equatorial Guinea, and Gabon) using the panel autoregressive distributed lag model (PARDL) estimated by means of mean group (MG) and pooled mean group (PMG) for the period 1970–2016. The paper estimated three panel models comprising the components of greenhouse gasses which includes nitrous oxide, carbon dioxide (CO2), and methane and examined their relationship with economic growth and energy consumption. The findings of the study showed evidence of a positive impact of economic growth on both CO2 and methane emissions in the long run. Its impact on nitrous oxide emissions although positive was found to be statistically insignificant. Energy consumption was also found to produce an insignificant positive impact on CO2, methane, and nitrous oxide emissions in the long run. In the short run, economic growth exerts a significant positive effect on methane emissions; however, its effect on CO2 and nitrous oxide emissions although positive was found to be statistically insignificant. Energy consumption produces an insignificant impact on all components of greenhouse gasses in the short run. In addition, our empirical results showed the presence of a non-linear relationship between methane emissions and economic growth, confirming the existence of the environmental Kuznets curve (EKC) only in the case of methane emissions model.

Does the Oil Revenues Affect the Macro Economic Variables Performance in Africa ? A Panel Data Analysis

Oil revenues play a vital and central role in the economies of developing countries and African countries are among the countries whose macroeconomic variables are affected by oil revenues. The objective of this study is to analyze and investigate the role of oil revenues on the macroeconomic variables in most of the oil-producing African countries. The Econometric method Pooled Ols model was employed in the study and the fixed and random technique data used was time sires cross panel data in the period (2000-2018). Based on the literature review, the selectedn sample study was on countries such as (Nigeria, Algeria, Angola, Gabon, Egypt, Congo, Egypt, Congo, Sudan, Chad, Ghana) and we employed the Gross Domestic Product as the target variable and Oil Revenues (Oiler), inflation (CPI), Exchange rate (Ex), export (Exp), Foreign Direct Invest (FDI), money supply (M2), as independent variables. The study result and analysis of the data indicated that oil revenue has an impact on most the macroeconomic variables in the study except CPI and money supply. The study also indicated a strong positive correlation between oil revenue and GDP growth rate on the countries samples study. The study concluded that one of the most important macroeconomic variables is oil revenues. It also recommended that African countries need support and need to put more effort in building strong economies that are not dependent on oil revenues; to work on diversifying the revenues of the states and work to preserve the right of the next generation to exploit natural and oil resources.

Accounting for the Effect of Exogenous Non-Economic Variables on Natural Gas Demand in Oil Producing African Countries

With less than 50% of the population of Sub-Saharan Africa having access to modern forms of energy and the desire to minimize the impact of energy consumption on the environment, there is a need to invest in an energy source that is affordable, available and environmentally clean. Natural gas is therefore the preferred choice of energy since it has minimum impact on the environment among the fossil fuels and is relatively affordable. In this study, the generalized methods of moments (GMM), a dynamic panel two stage least squares and the general unrestricted model (GUM) through Autometrics™ are employed to estimate the demand for natural gas in oil producing African countries. The GUM suggests that oil producing African countries have been consuming excessive natural gas that seems to offset improved technical efficiency of appliances. The study finds that both economic and technical factors are important drivers of natural gas consumption. In particular, output exerts a positive and significant influence on natural gas demand, whereas energy price and energy resource depletion have a negative and significant effect. It is recommended that energy efficiency measures should be implemented in these countries.

Does bad company corrupt good character? A spatial econometric analysis of oil resource management in Africa

PurposeA widely held belief before the 1990s – referred to as the oil-blessing hypothesis – was that oil discovery and production should promote economic growth and development and lead to poverty reduction. However, the so-called ‘oil-curse’ hypothesis, postulated by Sachs and Warner in 1995, challenged this belief, thus provoking a heated debate on the theme. The oil-curse hypothesis has been traditionally tested by means of cross-sectional and panel-data models. The author goes beyond these traditional methods to test whether the presence of spatial effects can alter the hypothesis in oil-producing African countries. In particular, this paper aims to investigate the effects on economic growth of oil production, oil resources and oil revenues along with the quality of democratic institutions, investment and openness to trade.Design/methodology/approachA Durbin spatial model, a cross-sectional model and panel-data model are used.FindingsFirst, the validity of the spatial Durbin model is vindicated. Second, consistently with the oil-curse hypothesis, oil production, resources, rent and revenues have a negative and generally significant effect on economic growth. This result is robust for across the panel data, spatial Durbin and spatial autoregressive models and for different measures of spatial proximity between countries. Third, the author finds that the extent to which the business environment is perceived as benign for investment has a positive and marginally effect on economic growth. Additionally, economic growth of a country is further stimulated by a spatial proximity of a neighbouring country if the neighbouring country has created strong institutions protecting investments. Fourth, openness to international trade has a positive and marginally significant effect on economic growth.Originality/valueThis paper examines theories and studies that have been done before. However, as the related literature on the growth–resource abundance nexus has rarely examined spatial effects, this study seeks to test jointly the spatial effect and the neighbouring effect on the oil curse hypothesis.

Analysing the efficiency of renewable energy consumption among oil‐producing African countries

AbstractAfrica's growth over the past two decades has been unprecedented. However, access to modern forms of energy seems to be a major hurdle for most African countries even though renewable energy sources abound. It has been argued that, knowledge of demand determinants and estimates help to guide investment and policy design in the energy industry. This study therefore examined the efficiency of renewable energy consumption. Furthermore, it investigated the effect of carbon emissions, GDP per capita, energy resource depletion and human capital development on renewable energy demand in 10 African countries. A dynamic panel generalised method of moments, panel fixed‐effect and a panel random‐effect models were applied. The results suggest that economic growth, energy prices, carbon emissions and energy resource depletion significantly affect renewable energy demand in one or all the models. The study recommends that to promote renewable energy consumption, economic welfare of the population should be enhanced.

Does Bad Company Corrupts Good Character? A Spatial Econometric Analysis of Oil Resource Management in Africa

A widely held belief before the 1990s – referred to as the oil-blessing hypothesis – was that oil discovery and production should promote economic growth and development, and lead to poverty reduction. However, the so-called ‘oil-curse’ hypothesis, postulated by Sachs and Warner in 1995, challenged this belief, thus provoking a heated debate on the theme. The oil-curse hypothesis has been traditionally tested by means of cross-sectional and panel-data models. We go beyond these traditional methods to test whether the presence of spatial effects can alter the hypothesis in oil-producing African countries. In particular, the effects on economic growth of oil production, oil resources and oil revenues along with the quality of democratic institutions, investment and openness to trade are investigated. Our findings are as follows. First, the validity of the spatial Durbin model is vindicated. Second, consistently with the oil-curse hypothesis, oil production, resources, rent and revenues have a negative and generally significant effect on economic growth. This result is robust for across the panel data, spatial durbin, and spatial autoregressive models, and for different measures of spatial proximity between countries. Third, we find that the extent to which the business environment is perceived as benign for investment has a positive and marginally effect on economic growth. Additionally, economic growth of a country is further stimulated by a spatial proximity of a neighbouring country, if the neighbouring country has created strong institutions protecting investments. Fourth, openness to international trade has a positive and marginally significant effect on economic growth. However, the significance of the parameter estimate is sensitive to the model that is being considered. Overall, the findings suggest that oil-producing African economies are cursed by oil discovery, production and revenues rather than by the spatial proximity with their neighboring countries.