The effect of natural resources rents on human development in selected African countries

Abstract

AbstractThis research analyses the effects of natural resource rents on human development in selected African countries. It focuses on a panel of 41 countries and covers the period 1996–2019. We used the ordinary least squares, quantile regression, and the two‐step system generalized method of moments (GMM) estimates. The results show that total natural resource rents have a negative effect on human development. However, this negative effect is mitigated by food imports, which ensure food security for the countries concerned. Furthermore, taken individually, the effect of natural resource rents on human development is differentiated according to their type: forestry and natural gas rents have a positive effect on human development while, oil and coal rents have a negative effect. After controlling for per capita income and other macroeconomic, institutional, and environmental factors, these results are robust. The results suggest better management of natural resource rents, economic diversification and industrial development, environmental protection, food security, and the investment of the natural resources rents in human capital development to ensure long‐term human development in the region.