How crude oil consumption impacts on economic growth of Sub-Saharan Africa?

• Published in: Energy (Oxford) Vol. 54; pp. 74 - 83
• Main Authors: Bashiri Behmiri, Niaz, Pires Manso, José R.
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier Ltd 01-06-2013; Elsevier
• Subjects: Applied sciences; Crude oil; Crude oil consumption; economic impact; Economics; Energy; energy efficiency; Energy management; Exact sciences and technology; Exporting; GDP; issues and policy; oils; Panel co-integration; Panel Granger causality; Panels; petroleum; Policies; prices; Sub-Saharan Africa; Africa; Panel co-integration; Crude oil consumption; GDP; Panel Granger causality; Consumption; Crude oil
• ISSN: 0360-5442
• DOI: 10.1016/j.energy.2013.02.052

This study investigates the causality relationship between crude oil consumption and economic growth in twenty three Sub-Saharan African countries. We applied a multivariate panel Granger causality framework during 1985–2011 and we included crude oil price as the control variable of the model. The results indicate that in the short-run, there is a bi-directional causality relationship between crude oil consumption and economic growth in oil importing region and there is a uni-directional causality relationship from crude oil consumption to GDP in oil exporting region. However, in the long-run there is a bi-directional causality relationship between them in both regions. Therefore, reducing crude oil consumption without employing appropriate policies adversely impacts on economic growth of Sub-Saharan Africa. Hence, in order to reduce crude oil dependency of the region policymakers should pay more attention to the issue of energy efficiency programs.
► We examined Granger causality among oil consumption and GDP in Sub-Saharan Africa. ► Crude oil price is the control variable of the model. ► There is short run bi-directional causality among oil and GDP (oil importing). ► There is short run uni-directional causality from oil to GDP (oil exporting). ► There is a long run bi-directional causality among oil and GDP in both regions.