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

Ifeoluwa Adeola Ologunde, Forget Kapingura and Kin Sibanda
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Ifeoluwa Adeola Ologunde: Economics Sciences Department, Management and Commerce Faculty, Alice Campus, University of Fort Hare, Eastern Cape 5700, South Africa
Kin Sibanda: Economics Sciences Department, Management and Commerce Faculty, East London Campus, University of Fort Hare, Eastern Cape 5700, South Africa

IJERPH, 2020, vol. 17, issue 18, 1-30

Abstract: 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.

Keywords: resource curse; paradox of plenty; unbalanced growth; pooled mean group; panel cointegration; autoregressive distributed lag (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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