University of Khartoum

The Relationship Between Fossil Fuel Subsidy and Economic Growth in Sudan (1990-2015)

The Relationship Between Fossil Fuel Subsidy and Economic Growth in Sudan (1990-2015)

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Title: The Relationship Between Fossil Fuel Subsidy and Economic Growth in Sudan (1990-2015)
Author: Assadig, Ahmed Mohamed Alhassan
Abstract: The main objective of this research is to examine the relationship between fossil fuel subsidy and economic growth. In order to meet the objective, this research used annual secondary data from 1990 to 2015 and then employed ordinary least squares (OLS) to ascertain the presence of a significant relationship between fossil fuel subsidy and (GDP) as it is a good indicator for economic growth. The model is formed by taking Gross domestic product (GDP) as dependent variable, and fossil fuel subsidy as the first explanatory variable. the research also employed three others explanatory variables, namely openness (OPEN), investment (INV) and consumer price index (CPI). The result of the regression indicates that there is a significant negative relationship between fossil fuel subsidy and GDP. The result on other explanatory variables shows that investment (INV) and consumer price index (CPI) are positive and significant toward GDP, however openness (OPEN) is negative and not significant. This research also examined the causal relationship between fossil fuel subsidy and (GDP) by Appling Granger causality test. Granger causality test shows that there is no causal relationship between fossil fuel subsidy and GDP. The research concluded that fossil fuel subsidy should be restructured in Sudan but in a gradual approach to reduce shocks to the economy
URI: http://khartoumspace.uofk.edu/123456789/27024


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