In terms of policy, our findings suggest that there have been missed opportunities, and that resource rents on their own may not lead to economic transformation.
However, it shouldn’t be all gloom and doom. Natural resources can support growth in the manufacturing sector if backed by deliberate interventions. First, by securing a fair share of resource rents, governments can use fiscal policy to finance carefully designed industrial policy, develop the requisite human capital and acquire appropriate technology that are critical to promoting manufacturing. This is the experience of Chile, Indonesia and Malaysia. Second, local content, beneficiation and valued addition activities can motivate investment in manufacturing activities. South Africa and Brazil are examples of this. Third, infrastructure (roads, rails, utilities, communication etc.) built to support resource extraction can also facilitate export-oriented manufacturing and agro-processing. Fourth, private sector incomes earned through employment and profits from extractive activities can generate the impetus for industrialization through higher domestic effective demand.
Policy makers in resource-rich countries can exploit the above pathways for manufacturing development and reverse the de-industrialisation trend to meet the SDG target 9.2—achieving inclusive and sustainable industrialization.
The longer paper, on which this blog is based, is forthcoming.
 We distinguish resource-rich African countries from their resource-poor counterparts using a 3% GDP share of resource rents as a cutoff point.
 The estimated equation is (MV/GDP)it = g + βRRit + αln(GDP-PC)it + d + t + eit. The subscripts i and t index country and year. d is a time invariant country specific effect. t is a time fixed effect. e is an equation error term. The results are g=5.18 (10.43); β=-0.12 (0.04); α=0.85 (1.46); with R2=0.12 and 1,434 number of observations. The numbers in parenthesis are standard errors. The coefficients are statistically significant at the 1% level.