Browsing by Author "Alemnew Amslau"

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    Analyzing the Impacts of Petroleum Consumption on Economic Growth in Ethiopia
    (AAU, 2025-01-20) Alemnew Amslau; Tewodros Negash (PhD)
    Ethiopia, like any other emerging countries, has demonstrated poor economic performance. Although the fact that the country's current economic performance is highly remarkable, there are a number of challenges to sustain the present trend of economic growth. The main challenge is the availability and scarcity of energy sources. Energy is a driving force of development and plays a significant role in the country’s economic growth and prosperity. Ethiopia's economy is heavily dependent on imported petroleum products. Petroleum is one of the most important commodities in social, political and economic challenges. The main objective of the study was to examine the impacts of petroleum consumption on economic growth. Specifically, it determined the short and long run relationship between petroleum consumption and economic growth. It also examined the impacts of petroleum price on economic growth, to analyzing and showing the trends of petroleum consumption and economic growth over the study period. It modified a growth model with GDP as the dependent variable and labour force, domestic capital investment and petroleum consumption and unit price of petroleum products as the independent variables to be estimated. An exploratory research design was used and research work followed a quanitative approach by using secondary source of data was used to collect information and Error Correction model was used to estimate. First, the study determined the stationarity of the variables by using ADF and phillips-perron test and its result shows that all the variables are non-stationary at levels but stationary at first difference. The Cointegration tests result indicated that the null hypothesis of no-cointegration was rejected at 5% level of significance. The estimation results of the long-run relationship revealed that the relationship between PC,AUPP and DCI with GDP was negative and statistically significant but LF was positive and not statistically significant. The estimated methods of the error-correction model shows that in the short run there was a positive and statistical insignificance impacts of lagged petroleum consumption on real GDP. The Granger causality test result shows there was unidirectional causal relationship between petroleum consumption to GDP. Finally the result concluded that petroleum consumption has negative impacts on economic growth and the country is recommended that to derives or formulate policy implications from the results obtained regarding the implementations of the upstream projects of the petroleum and gas industry and to develop in alternative energy sources as substitutes of petroleum products