Mitigating the Impact of Global Economic Policy Uncertainty on Social Sustainability: The Moderating Role of Governance and Natural Resource Rents in Sub-Saharan Africa

Global economic policy uncertainty has emerged as a significant challenge for developing regions, with Sub-Saharan Africa particularly vulnerable due to its fragile economies and social systems that rely on external support. This study examines the effect of global economic policy uncertainty on social sustainability and how this relationship is moderated by governance effectiveness and natural resource rents. These relationships were examined using 27 years of panel data from 45 Sub-Saharan African countries, spanning 1997 to 2023. The Augmented Mean Group (AMG), Common Correlated Effects Mean Group (CCMG), and the two-step difference Generalized Method of Moments (GMM) estimators are advanced methods for analyzing data and estimating relationships among variables. The study found that global economic policy uncertainty had a significant negative effect on social sustainability. Furthermore, the study revealed that governance effectiveness and natural resource rents positively and significantly moderate the relationship between global economic policy uncertainty and social sustainability. These findings have significant implications for policy and governance, highlighting the critical need for governments, especially in developing and resource-dependent regions, to strengthen institutional capacity and fiscal frameworks in order to manage the adverse effects of global economic policy uncertainty. They underscore the importance of developing responsive, transparent, and accountable governance structures that can effectively allocate resources toward social priorities even during periods of external economic volatility.