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Extractive Wealth, Governance, and Sustainable Development in Africa: Disaggregated Evidence on Growth, Inequality, Environment, and Security

Author

Listed:
  • Xinting Yue
  • Ridwan Lanre Ibrahim
  • Abdulrahman Alomair
  • Abdulaziz S. Al Naim

Abstract

Why do resource‐rich African countries struggle to achieve inclusive and sustainable development despite decades of extractive wealth? This study revisits the resource curse hypothesis through the lens of institutional mediation and SDG‐aligned outcomes, focusing on 10 of Africa's most resource‐dependent economies between 1996 and 2022. Employing a mixed‐method econometric strategy—Common Correlated Effects Mean Group for baseline analysis, Cross‐Sectionally Augmented ARDL (CS‐ARDL) for short‐run, and Mean Group estimators for country‐specific insights—the study investigates the effects of natural resource rents on economic growth (SDG 8), income inequality (SDG 10), environmental degradation (SDG 13), and militarization (SDG 16). A composite institutional quality index, derived via Principal Component Analysis of six World Governance Indicators, is introduced as a moderator to capture governance effectiveness. Results reveal a consistent pattern of multidimensional resource curse: resource rents depress growth, worsen inequality, heighten environmental degradation, and drive up military spending. However, strong institutional quality systematically mitigates these negative outcomes. Country‐specific estimates identify Nigeria, Angola, and Congo as particularly vulnerable to institutional failure. These findings affirm that institutional capacity is not just a mediating variable but a decisive condition for converting extractive wealth into sustainable development. The study offers actionable policy insights aligned with SDG targets, emphasizing the need for governance reform, fiscal accountability, and environmental responsibility. It contributes to a growing literature that calls for disaggregated, multidimensional, and governance‐sensitive approaches to resource management in Africa.

Suggested Citation

  • Xinting Yue & Ridwan Lanre Ibrahim & Abdulrahman Alomair & Abdulaziz S. Al Naim, 2026. "Extractive Wealth, Governance, and Sustainable Development in Africa: Disaggregated Evidence on Growth, Inequality, Environment, and Security," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(2), pages 1533-1552, April.
    • Handle: RePEc:wly:sustdv:v:34:y:2026:i:2:p:1533-1552
    DOI: 10.1002/sd.70405
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