Is mother nature responsible for Africa's predicaments? Pathways to breaking the chains of the resource curse through the lens of good governance, digitalisation and energy transition

Abstract

As regards the question whether natural resource affluence is a benediction or curse to sustainable development, the jury's verdict is still awaited. While we impatiently await the jury's verdict, this study provides empirical evidence that Mother Nature is responsible for Africa's predicaments with regard to economic development and environmental sustainability. Specifically, the system GMM estimates from 37 African economies reveal that: (i) natural resource affluence inhibits economic development, (ii) resource rents exacerbates carbon emissions thereby impeding environmental sustainability (iii) natural resource rents interacts with governance to produce negative synergy effects on economic growth and environmental pollution, (iv) resource rents interacts with ICT to produce respective positive net effects and negative synergy effects on economic growth and pollution emissions, (v) while non-renewable energy consumption inhibits economic growth and exacerbates pollution emissions, renewable energy consumption promotes environmental protection, (vi) we provide evidence of the U-shaped and inverted N-shaped EKC for natural resources, while also validating the inverted U-shaped EKC hypothesis relating to the nexus between per capita GDP and pollution emissions. Contingent on these findings, African countries can break the chains of the resource curse by designing sound and complementary policies upon attainment of the established thresholds by the policy modulating variables. Equally, various governments should strengthen governance quality and encourage digitalisation of the resource sector. Furthermore, African governments should propel the energy transition process by increasing investments in alternative clean energy sources in order to catalyse the attainment of the continent's Agenda 2063.

Keywords

• Mother nature
• Resource curse
• Economic development
• Environmental pollution
• Africa