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Working Paper 75 - External Shocks and the HIPC Initiative: Impacts on Growth and Poverty in Africa
Crude oil prices have increased from about $12 per barrel in 1999, to above $50 per barrel in 2004, and even reached $60 in June 2005, exacerbating already serious poverty in most oil-importing African countries. Fortunately, some export commodity prices of oil-importing African countries (like for example, coffee) have also recovered in 2003 and 2004, counter-balancing the negative impact of increases in oil prices. Yet, given the high degree of import and export concentrations in all poor African countries, import and export price volatilities continue to have significant negative impacts on growth in these countries. Interestingly, little empirical work exists on the systematic quantification of the impact of these external shocks on African countries.