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Exploring the Inflationary Effect of Oil Price Volatility in Africa's Oil Exporting Countries

Author

Listed:
  • Sina J. Ogede

    (Olabisi Onabanjo University, Ago-Iwoye, Nigeria)

  • Emmanuel O. George

    (Olabisi Onabanjo University, Ago-Iwoye, Nigeria)

  • Ibrahim A. Adekunle

    (Olabisi Onabanjo University, Ogun State, Nigeria)

Abstract
A range of explanations had been offered for the apparent change in oil price-inflation relationship outcomes ranging from the possible use of alternate energy sources, change in the structure of output regarding fewer oil intensive sectors and the role of fiscal and monetary in the affected oil-exporting countries. These changes had drawn the attention of stakeholders, government and the society at large to the anecdotal relationship among oil price volatility, inflation, and output in Africa oil-exporting countries. This study leans empirical credence to the impact of oil price volatility on inflation and economic performance in the Africa oil-exporting countries from 1995 through 2017. We employed the Pool Mean Group estimation procedure with the inference drawn at a 5% level of significance. We found that oil price volatility had a negative and significant effect on inflation in Africa oil-exporting countries. The study concluded that oil price volatility had a substantial impact on inflation in the Africa oil-exporting countries. The study, therefore, recommended that Africa oil-exporting countries should adopt precautionary measures to monitor inflation potentials due to different responses of inflation to positive and negative oil price shocks.

Suggested Citation

  • Sina J. Ogede & Emmanuel O. George & Ibrahim A. Adekunle, 2020. "Exploring the Inflationary Effect of Oil Price Volatility in Africa's Oil Exporting Countries," Research Africa Network Working Papers 20/020, Research Africa Network (RAN).
    • Handle: RePEc:abh:wpaper:20/020
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    References listed on IDEAS

    as
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    Cited by:

    1. Maku Olukayode E. & Ogede Jimoh S. & Osisanwo Bukonla G., 2021. "Oil Price and Macroeconomic Fundamentals in African Net Oil-Exporting Countries: Evidence from Toda–Yamamoto and Homogeneous Causality Tests," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 9(1), pages 102-114, September.

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    More about this item

    Keywords

    Oil Price Volatility; Inflation; Growth Outcomes; Pool Mean Group; Africa;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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