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Symmetric or Asymmetric: How is Economic Growth Responding to Global Economic Uncertainty in Africa's Oil Exporters?

Author

Listed:
  • Jonathan E. Ogbuabor
  • Oliver E. Ogbonna
  • Onyinye I. Anthony-Orji
  • Davidmac O. Ekeocha
  • Obed I. Ojonta

Abstract

Motivated by the persistent fall in oil prices due to incessant uncertainty-inducing events in recent years, this study empirically examined if economic growth in Africa's top five oil exporters (Algeria, Angola, Egypt, Libya, and Nigeria) is responding asymmetrically to changes in global economic uncertainty as well as uncertainties from U.S., Europe and China using nonlinear ARDL framework from 1997Q1 to 2021Q4. We find that rising global uncertainty hampers economic growth in these economies, while declining global uncertainty significantly enhances growth in Nigeria, Angola and Libya in the short run, but becomes growth-retarding in the long run. Thus, economic growth responds asymmetrically to global uncertainty, especially in the short run. The findings are robust to U.S., Europe, and China uncertainties, except that economic growth in Libya and Algeria remained unresponsive to U.S. and China uncertainties respectively. We concluded that Africa's oil exporters should embrace policies that can strengthen their resilience to global economic uncertainty as well as uncertainties from U.S., Europe, and China.

Suggested Citation

  • Jonathan E. Ogbuabor & Oliver E. Ogbonna & Onyinye I. Anthony-Orji & Davidmac O. Ekeocha & Obed I. Ojonta, 2023. "Symmetric or Asymmetric: How is Economic Growth Responding to Global Economic Uncertainty in Africa's Oil Exporters?," Prague Economic Papers, Prague University of Economics and Business, vol. 2023(4), pages 446-472.
    • Handle: RePEc:prg:jnlpep:v:2023:y:2023:i:4:id:836:p:446-472
    DOI: 10.18267/j.pep.836
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    References listed on IDEAS

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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Mindaugas Butkus & Diana Cibulskiene & Lina Garsviene & Janina Seputiene, 2022. "Role of Uncertainty in Debt-Growth Nexus," Prague Economic Papers, Prague University of Economics and Business, vol. 2022(1), pages 58-78.
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    More about this item

    Keywords

    global economic uncertainty; economic growth; oil exporters; nonlinear ARDL model; Africa;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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