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Effect of oil price volatility on the trade balance in sub-Saharan Africa
This is an article published in OPEC Energy Review, September 2022
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| Format: | Article |
| Language: | English |
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OPEC Energy Review
2024
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| _version_ | 1867613136654172160 |
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| access_status_str | Open Access |
| author | Forson, Priscilla Dramani, John Bosco Frimpong, Prince Boakye Arthur, Eric Sulemana, Mahawiya |
| author2 | 0000-0002-4863-7065 |
| author_browse | 0000-0002-4863-7065 Arthur, Eric Dramani, John Bosco Forson, Priscilla Frimpong, Prince Boakye Sulemana, Mahawiya |
| author_facet | 0000-0002-4863-7065 Forson, Priscilla Dramani, John Bosco Frimpong, Prince Boakye Arthur, Eric Sulemana, Mahawiya |
| author_sort | Forson, Priscilla |
| collection | Thesis |
| description | This is an article published in OPEC Energy Review, September 2022 |
| format | Article |
| id | oai:ir.knust.edu.gh:123456789/15557 |
| institution | KNUST (Ghana) |
| language | English |
| last_indexed | 2026-06-10T12:31:21.331Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from KNUSTSpace — Kwame Nkrumah University of Science & Technology (Ghana) |
| publishDate | 2024 |
| publishDateRange | 2024 |
| publishDateSort | 2024 |
| publisher | OPEC Energy Review |
| publisherStr | OPEC Energy Review |
| record_format | dspace |
| source_str | KNUSTSpace — Kwame Nkrumah University of Science & Technology (Ghana) |
| spelling | oai:ir.knust.edu.gh:123456789/15557 Effect of oil price volatility on the trade balance in sub-Saharan Africa Forson, Priscilla Dramani, John Bosco Frimpong, Prince Boakye Arthur, Eric Sulemana, Mahawiya 0000-0002-4863-7065 0000-0002-3640-2664 0000-0002-2829-9257 0000-0003-2327-1797 0000-0003-2281-3590 This is an article published in OPEC Energy Review, September 2022 Crude oil price volatility as an important driver of the trade balance of economies has been widely documented in the literature. However, studies on the effect of oil price volatility on the trade balance in sub-Sahara Africa (SSA) are limited. In this paper, we explore the effect of crude oil price volatility on the trade balance across 34 SSA countries using Pooled Mean Group (PMG) and Common Correlated Effect Pooled Mean Group (CCEPMG) estimators for the period January 2004 to December 2017. We find that crude oil price volatility exerts a negative effect on the trade balance of SSA countries. We further demonstrate that inflation, interest rates and exchange rates are significant transmission channels for oil price volatility to impact trade balance. We suggest that policymakers hedge as well as adopt price-smoothing schemes to minimise the volatility of oil prices on trade balance. Again, countries should adopt an inflation-targeting regime to ensure the stability of the general price level. Finally, central banks of the respective countries should apply a combination of foreign exchange market interventions and interest rate changes to reduce the effect of oil price volatility on their trade balance when the exchange rate is taken into account. KNUST 2024-02-28T11:20:38Z 2024-02-28T11:20:38Z 2022-09 Article OPEC Energy Review, September 2022 https://ir.knust.edu.gh/handle/123456789/15557 en application/pdf OPEC Energy Review |
| spellingShingle | Forson, Priscilla Dramani, John Bosco Frimpong, Prince Boakye Arthur, Eric Sulemana, Mahawiya Effect of oil price volatility on the trade balance in sub-Saharan Africa |
| title | Effect of oil price volatility on the trade balance in sub-Saharan Africa |
| title_full | Effect of oil price volatility on the trade balance in sub-Saharan Africa |
| title_fullStr | Effect of oil price volatility on the trade balance in sub-Saharan Africa |
| title_full_unstemmed | Effect of oil price volatility on the trade balance in sub-Saharan Africa |
| title_short | Effect of oil price volatility on the trade balance in sub-Saharan Africa |
| title_sort | effect of oil price volatility on the trade balance in sub saharan africa |
| url | https://ir.knust.edu.gh/handle/123456789/15557 |
| work_keys_str_mv | AT forsonpriscilla effectofoilpricevolatilityonthetradebalanceinsubsaharanafrica AT dramanijohnbosco effectofoilpricevolatilityonthetradebalanceinsubsaharanafrica AT frimpongprinceboakye effectofoilpricevolatilityonthetradebalanceinsubsaharanafrica AT arthureric effectofoilpricevolatilityonthetradebalanceinsubsaharanafrica AT sulemanamahawiya effectofoilpricevolatilityonthetradebalanceinsubsaharanafrica |