Are natural resources an impetus for economic growth in Africa?

Abstract This study examines the effects of natural resource endowments on economic growth in Africa based on a sample of 37 African countries from 1996 to 2019. The sample is split into resource‐rich and resource‐poor countries. By employing the autoregressive distributed lag model with a linear interaction between natural resource revenue and institutional quality, a contingent effect of natural resource revenue on economic growth is established, both in the long and short run. Contrary to previous related studies, this study reveals that the resource status of the countries concerned has a significant impact on the nature of the results obtained. Specifically, in resource‐rich countries, weak institutions have been found to exacerbate the negative relation between natural resources and economic growth in the long run, whereas in the short run, these variables are found to be complementary toward enhancing economic growth. Meanwhile, in resource‐poor countries, institutional quality and natural resource revenues individually compete with each other in relation to growth, but when interacted, their combined effect positively and significantly improves economic growth in the long run.