The Paradox of Plenty: Unraveling the Impact of Natural Resource Rents on Health Outcomes in Sub‐Saharan Africa

This study examines the linear and non‐linear effects of natural resource rents on health performance in 48 Sub‐Saharan African countries between 2000 and 2023. By employing the Driscoll–Kraay strategy to correct for cross‐sectional dependence and the IV‐GMM approach to address potential endogeneity, the analysis reveals a nuanced and robust inverted U‐shaped relationship between natural resource rents and health outcomes. Specifically, the results show that natural resources exert a positive linear effect at moderate levels, suggesting that resource revenues, when effectively mobilized, enhance health performance. However, the negative non‐linear effects highlight that over‐reliance on resource rents undermines sustainability, as volatility and misallocation erode the capacity of resource wealth to translate into long‐term improvements in population health. The robustness checks reinforce these findings across resource‐rich and resource‐poor countries, as well as among middle‐income economies, while differences emerge for low‐income economies where modest levels of resource rents remain insufficient to overcome the severe deficit in health infrastructure and institutional capacity. The disaggregation of resource types further reveals that oil, gas, coal, and forest rents are associated with health performance gains at moderate levels, though the non‐linear results confirm that higher dependence on any resource rent type eventually worsens health performance. Overall, the study highlights that policy design must establish frameworks that ensure natural resource wealth is converted into sustainable health improvements for populations across Sub‐Saharan Africa.