The defence sector faces the resource curse: Effect of natural resource rents on defence spending in Sub-Saharan Africa

This study investigates the effect of natural resource rents (NRR) on military spending in Sub-Saharan Africa (SSA) from 1996 to 2021. The study employs the system Generalized Method of Moments and establishes three main results. First, military spending is negatively affected by coal, forest, mineral, and natural gas rents but positively affected by oil rents. Second, institutional quality plays a role in the link between NRR and military spending, mainly through corruption. Third, robustness checks indicate that all these results are sensitive to country characteristics but robust to the instrumental variable two-stage least squares and Driscoll and Kraay's fixed effects methods. Additionally, the use of forest and natural gas rent to finance military spending is driven by several factors, including cross-border conflicts, economic risk, ethnic tensions, military involvement in politics, external debt risk, and inflation risk. Therefore, reforms of military institutions in SSA are essential, and they should consider respect for universal standards of public spending and the fight against corruption. In this sense, the preparation and execution of military expenditures must be subject to administrative, parliamentary, and jurisdictional controls. Creating anti-corruption units within the ministries responsible for Defence and Security is strongly encouraged. Besides, diplomatic efforts in conflict resolution, economic development measures, and risk management policies could help reassess priorities regarding defence spending.