The Dynamics of Oil Price And Economic Growth in Six Low-Income Sub-Saharan African Countries

Keywords: oil price, economic growth, country-based literature, oil-importing countries, SSA

Abstract

This paper highlights the dynamics of oil price and economic growth in six low-income oil-importing countries in sub-Saharan Africa. These countries are Ethiopia, Gambia, Liberia, Mozambique, Senegal and Tanzania. The study explores the individual countries’ energy sources and the effect of oil price on economic growth. The study finds that low-income countries in SSA mainly depends on biofuel for energy sources and oil is mainly used in the transport and services sector. Therefore, while the effect of oil price on economies of low-income countries may not be huge due to the structure of their energy mix, biofuels have an adverse effect on climate change. However, oil demand has increased in the countries examined in this study, with countries like Liberia spending about 15% of its income on oil imports and Ethiopia’s total import volume of petroleum products increasing by approximately 10% from 2017 to 2018. Therefore, low-income countries’ policymakers should pay attention to energy efficiency policies that will exacerbate growth.

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Published
2021-05-07
Section
Articles