Understanding the Interplay: Oil price and renewable energy investment in Africa's net oil importing and net oil exporting countries

This study investigates the symmetric and asymmetric relationships between oil price and renewable energy investment (REI) in six African countries (Algeria, Angola, Egypt, Ethiopia, Nigeria, and South Africa), examining the differences between net oil-importing and net oil-exporting countries in Africa. The study employs autoregressive distributed lag bounds testing and the non-linear autoregressive distributed lag approaches to analyse the data. The results reveal symmetric and asymmetric relationships between oil prices and REI across the countries examined. Algeria, Egypt, and Nigeria exhibit symmetric relationships, whereas Angola, Ethiopia and South Africa demonstrate asymmetric relationships. Oil prices have statistically significant effects on REI in all countries, albeit with varying levels of magnitude. In symmetric relationships, oil price influences REI in the long run for Egypt and Nigeria, while Algeria shows significant effects in both the short- and long-term. In asymmetric relationships, a positive change in oil price has a significant negative impact on REI in the long run for Angola, Ethiopia, and South Africa, while a negative change in oil price positively affects REI. Notably, Ethiopia does not exhibit statistical significance regarding negative oil price change. Overall, the study provides valuable insights into the complex relationship between oil prices and REI in Africa, emphasising the need for strategic policies to promote renewable energy adoption and reduce dependence on fossil fuels.