The Extractive Resource Curse Revisited: Absolute Versus Relative De‐Industrialization in Africa

Michaël Goujon () and Edouard Mien ()
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Michaël Goujon: CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne
Edouard Mien: FERDI - Fondation pour les Etudes et Recherches sur le Développement International

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Abstract: There is a longstanding history of debates on the impact of natural resources on Africa's industrialization. Yet, most studies have relied on "relative" measures of industrialization (manufacturing value added as a share of GDP), while overlooking its "absolute" dimension (manufacturing value added per capita). This omission could have led to erroneous interpretations of the observed trends in manufacturing activity, particularly for countries characterized by large and unstable resource revenues. Using a balanced panel of 50 African countries from 1995 to 2019, and combining relative and absolute measures of sectoral value added for manufacture, agriculture, construction, and services, this paper revisits the evidence on premature deindustrialization in Africa and the impact of extractive resources. Employing panel OLS, least absolute deviations, fixed effects filtered, and first differences, the analysis finds little support for the view that resources undermine industrialization: if anything, hydrocarbons and minerals have had a modest positive effect on manufacturing activities in Africa. On the other hand, results show a clear negative impact of extractive resources on agriculture and positive impacts on construction and services. This suggests that Africa's structural challenge may be less about de‐industrialization than about "de‐agriculturalization," particularly in resource‐dependent economies.

Keywords: Africa; Industrialization Extractive Resources Structural Change Africa Resource Curse; Resource Curse; Industrialization; Structural Change; Extractive Resources (search for similar items in EconPapers)
Date: 2025-10-21
Note: View the original document on HAL open archive server: https://hal.science/hal-05329337v1
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Published in Review of Development Economics, 2025, ⟨10.1111/rode.70072⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05329337

DOI: 10.1111/rode.70072

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