A Study On The Impact Of Natural Resources Endowment On Economic Growth: Panel Evidence From West Africa

Africa is endowed with substantial amounts of mineral resources and ranks as second in quantity of world reserves of bauxite,chromite,cobalt,industrial diamond,manganese,phosphate rock,platinum-group metals,soda ash,vermiculite and zirconium.The region is also a major global producer of these minerals.These resources play a crucial role in the economy,as they account for a significant share of exports.Indeed,mineral resource exports contribute to merchandise exports in 24(44per cent)of Africa's 54 countries.The general economic understanding and theory implies that significant revenues from natural resources should generate wealth,improves economic growth and reduces poverty.However,existing studies have produced mixed and conflicting result,viewing natural resources as both a curse and blessing.The issue now is,can natural resource rich countries appears to have sound economic growth than resource poor countries? The above scenarios are also the case for West Africa(WA)region,the region is also faced with abundance of natural resources ranging from diamonds,gold,iron ore,crude oil,aluminum,uranium,bauxite,manganese,tine and columbite etc.The discovery of natural resources in West Africa aims at boosting economic activities and improving livelihood for the citizens in the region,yet much evidence suggests the opposite for the West Africa region(Stevens,2008).The focus of this research is to examine the impact of natural resources endowment and economic growth in West Africa.Weak economic growth as a result of government ineffectiveness in managing the economy,poor management of natural resources export revenues and corruption are the cases for most Sub-Sahara African countries including Mali,and these scenarios still remains a challenge.The study investigates the impact of natural resources endowment on economic growth in Mali using natural resources export revenue and growth controls data from 1990-2013.The Pair wise correlation result supports the hypothesis that natural resources export(endowment)has a positive impact on economic growth in Mali.However,when natural resources export interacts with corruption,the impact on economic growth is negative.That is the simultaneous interaction of natural resources export and corruption is bad for growth.The Granger Casualty result also confirmed the hypothesis that causality exists between economic growth and natural resources export(endowment).On this basis,we look forward to future study on growth issues with a view to further provoke policy discourse.Such study could be the nexus between poverty reduction and economic growth in Sub-Saharan Africa.Despite data limitation,our finding are still relevant and provides solid foundation of achieving broad based economic growth,preventing the re-occurrence of natural resource curse,civil conflict and corruption not only in west Africa but in Africa and worldwide.