Africa’s Oil Abundance and External Competitiveness: Do Institutions Matter?
IMF Working Papers, July 1, 2008
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Bibliographic details
- Authors: Mahvash S Qureshi
- Published: July 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451870305.001
Key findings
- Oil-rich economies in sub-Saharan Africa lag other major oil-exporting developing countries in:
- diversification
- global market share
- the overall investment climate
- The poor performance of the non-oil sector in oil-rich African countries can be largely attributed to:
- weak infrastructure
- weak institutional quality
- Institutional quality is a significant determinant of how oil abundance affects competitiveness of the non-oil sector, explaining divergent experiences across oil-rich countries
- Oil wealth does not necessarily weaken the non-oil tradable sector; prudent use of revenues to reduce oil dependence can mitigate Dutch disease and enable countries to benefit from oil booms
Analysis and implications
- Comparative analysis of structural competitiveness highlights systematic differences in non-oil export performance between oil-rich Africa and other oil-exporting developing countries.
- The interaction between oil abundance and institutional quality is central: stronger institutions diminish negative impacts on the non-oil sector and support diversification.
- Policy implication: improving infrastructure and institutional quality is critical for enhancing non-oil export competitiveness and leveraging oil revenues for broader economic development.