Effect of crude oil price changes on human development in Ghana : a structural equations modeling approach

While the effect of oil price fluctuations on the macro economy is well studied, their effect on human index remains under researched. Thus, this paper examines the effect of oil price changes on human development in Ghana using annual data covering the period from 1971 to 2019. In order to ascertain the specific effects of oil price changes on various human development components, the structural equation modeling approach was employed. The research findings revealed a negative and significant effect of oil price changes on school enrolment and GDP per capita. The study further showed a negative but insignificant relationship between oil price changes and life expectancy at birth. It is recommended that the government develops alternative sources of energy such as natural gas, solar power plants and biofuels so as to reduce the country's dependence on oil.