Energy Consumption, Trade Openness and Economic Development of Some Major Oil-Producing Countries in Africa

Abstract

To investigate the nexus between energy consumption, trade openness and economic development for seven oil-producing countries in Africa, this study employs the panel Autoregressive Distributive Lag (ARDL) techniques on data from 1971 to 2017. The Levin-Lin-Chiu, Pesaran-Shin and Breitung tests were used to ascertain the stationarity of the variables. The Hausman test showed that the mean group heterogeneous ARDL is the best technique to estimate the short and long-run relationship of the model. The result revealed that trade openness and the nature of energy consumed have significant impacts on economic development in the selected oil-producing countries. A percentage increase in trade openness decreases economic development by about seven precent but boosts development by twenty-eight percent. From the findings, it is recommended that policies be channelled to favour enabling environment, African free trade zone, economic freedom, private financial growth, ease of doing business, energy efficiency, renewable energy, carbon capture and storage, private property rights and security in Africa.