Resource Dependence and Social Stratification in Sub-Saharan Africa

This study examines the relationship between natural resource rents and income inequality in Sub-Saharan Africa (SSA). The empirical analysis covers 24 countries over the period 1998-2020. Econometric estimations are conducted using both fixed and random effects models to account for country-specific and time-invariant factors. Using the Gini coefficient as a proxy for inequality, the results suggest that total natural resource rents do not have a statistically significant effect on income inequality in the region. In contrast, access to financial services and digital technologies appear to be more influential in reducing inequality. The findings highlight the potential importance of inclusive development policies, such as allocating resource wealth to social programs in education, healthcare, and infrastructure. Additionally, promoting economic diversification and strengthening governance institutions may support more effective management of natural resources. The observed negative and statistically significant associations between information and communication technology (ICT) and financial development with inequality indicate that investments in ICT infrastructure and measures to enhance financial inclusion could contribute to addressing income disparities in the region.