Author: Mutiu A. Oyinlola, Abdulfatai A. Adedeji & Modupe O. Bolarinwa
Volume: 61 Issue No:1 Year:2019

Abstract: This study assesses whether natural resource rents can enhance the positive association between human capital and industrial development using a sample of 14 sub-Saharan African (SSA) countries over the period 1995 to 2015. The dynamic approach was adopted through the use of the system generalized method of moments. The empirical findings reveal that the direct impact of natural resource rents on industrial development is negative and statistically insignificant. The study further confirms an insignificant impact of human capital on industrial development in the presence of natural resource rents. This implies that despite the huge amount of rents realized from natural resources, the industrial sector is yet to benefit substantially from this. In addition, a direct drag of education expenditure (one of the indicators of human capital) on industrial development was observed. Thus, the study recommends that governments in the SSA region need, as a matter of urgency, to efficiently utilize proceeds from the sale of natural resources by massively investing in meaningful human capital development.

JEL classification: I190, I150, L160, O32, O130, Q43