Oil Price and Macroeconomic Fundamentals in African Net Oil-Exporting Countries: Evidence from Toda–Yamamoto and Homogeneous Causality Tests

Despite the wealth of literature on the oil price growth examinations, there is a shortage of research on the causality between oil prices and various macroeconomic fundamentals with regard to the group of net oil-exporting countries in Africa. This study examines the causality between oil price volatility and macroeconomic fundamentals in net oil-exporting countries in Africa using the Toda–Yamamoto and homogeneous causality techniques to gauge the nexus in the selected countries from 1995 to 2019. Our findings from the panel causality test suggest that oil price volatility significantly Granger causes the economic growth of the selected net oil-exporting countries in Africa. However, a mixed outcome was observed for the cross-sectional analyses using the Toda–Yamamoto causality test. Hence, the study offers the need for a policy framework that would drive the output growth as oil price changes continue to threaten macroeconomic variables.