Dynamics in Economic Diversification in Oil Producing African Countries-Implications for Policy Formulation
16 Pages Posted: 25 Feb 2018
Date Written: July 28, 2016
The recent slump in crude oil prices in global markets has taken a serious toll on oil producing countries. Producers in Africa are not left out as evidenced in slower growth, rising fiscal deficit, debt problems and deteriorating current account balance. Economic diversification is viewed as means of avoiding the resource curse problems by fostering long term economic growth. This study therefore reviews the trends and dynamics in economic diversification in oil producing countries. The study argues that the resource curse can only be avoided when the revenues generated from the exploitation of oil are invested in other productive sectors of the economy thereby decoupling economic growth from the extractive sector. The study revealed that the economies of these countries are still reliant on the petroleum sector despite numerous efforts and strategies aimed diversification. The agricultural and manufacturing sectors continues to perform poorly due to bottlenecks such as unfriendly business environment, governance challenges and inadequate supply of power inherent in these countries .The study therefore recommends policies aimed at removing these barriers to serve as catalyst for the diversification agenda.
Keywords: Diversification, Oil Prices, Africa, Economic Growth, Resource Curse
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