Farag khalifa Gaballa, Nazatul Faizah Haron

Examining the Role of Oil and Non-Oil Revenues, and Oil Price Fluctuations on Economic Growth in African Oil Exporting Countries

Introduction

Examining the role of oil and non-oil revenues, and oil price fluctuations on economic growth in african oil exporting countries. Investigate oil/non-oil revenues & oil price effects on economic growth in African oil exporters (Nigeria, Angola, Algeria, Libya, Egypt), offering insights for diversification & policy.

Abstract

This study investigates the complex relationships between oil revenues, non-oil revenues, oil price fluctuations, and economic growth in African oil-exporting countries. Targeting Nigeria, Angola, Algeria, Libya, and Egypt, the research analyzed a comprehensive dataset spanning 1970-2023 using advanced second-generation panel econometric techniques. The cross-sectional Autoregressive Distributed Lag (ARDL) model examined the long-run and short-run dynamics of economic growth determinants. The sample comprised five leading African oil-producing countries, with data sourced from the World Bank Development Database. Results demonstrated significant positive relationships between GDP and oil revenue, non-oil revenue, oil prices, capital, and labor. The research revealed the critical importance of economic diversification, human capital investment, and strategic revenue management in driving sustainable economic growth. The study offers substantial implications for policymakers, economists, and development practitioners by providing insights into economic transformation mechanisms in resource-dependent economies. It contributes to resource economics literature by offering empirical evidence of complex economic interactions in African contexts. The originality of the research lies in its comprehensive approach, innovative methodological techniques, and detailed exploration of economic growth dynamics in African oil-exporting countries.

Review

This study presents a timely and highly relevant investigation into the intricate dynamics of economic growth in African oil-exporting countries, a topic of significant importance given the volatile global energy markets and the persistent challenge of resource curse. By meticulously examining the roles of oil and non-oil revenues, alongside oil price fluctuations, the research offers critical insights into the mechanisms driving economic transformation in resource-dependent economies. Its comprehensive scope, focusing on key nations such as Nigeria, Angola, Algeria, Libya, and Egypt over an extensive period from 1970 to 2023, positions it as a valuable contribution to both the academic literature on resource economics and policy discourse on sustainable development in Africa. A major strength of this research lies in its robust methodological approach. The application of advanced second-generation panel econometric techniques, specifically the cross-sectional Autoregressive Distributed Lag (C-ARDL) model, is well-suited for analyzing panel data that likely exhibits cross-sectional dependency and allows for the examination of both long-run equilibrium and short-run adjustment dynamics. This sophisticated methodology enhances the credibility and reliability of the findings. The study's results, indicating significant positive relationships between GDP and various factors including oil revenue, non-oil revenue, oil prices, capital, and labor, provide clear empirical evidence. Crucially, the emphasis on the importance of economic diversification, human capital investment, and strategic revenue management as pathways to sustainable growth offers actionable insights for policymakers. The findings carry substantial implications for policymakers, economists, and development practitioners seeking to foster resilient and diversified economies in resource-rich African nations. By underscoring the positive impact of non-oil revenues and strategic revenue management, the study provides a compelling argument for moving beyond oil dependency. Its contribution to the resource economics literature is notable, offering fresh empirical evidence from an African context, which often presents unique challenges and opportunities. The originality of the research, stemming from its comprehensive approach, innovative techniques, and detailed exploration of complex growth dynamics, ensures its relevance and positions it as an important reference for future research and policy formulation in this vital area.

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