This study aims to explore the intricate impact of natural resource extraction and economic growth in the Democratic Republic of the Congo (DRC) by analyzing time-series data from 1990Q1 to 2018Q4.
The short- and long-term dynamics are investigated through the ARDL approach and frequency-domain causality tests. The research identifies a significant survivalist growth phase in the short run, where fossil fuels, electricity and resource rents provide immediate boosts to gross domestic product. However, long-term findings corroborated by fully modified OLS and dynamic OLS estimators reveal profound structural inefficiencies.
While electric power consumption serves as a vital positive catalyst for sustained growth, persistent dependence on fossil fuels, renewable energy and natural resource rents exerts statistically significant negative effects, confirming the resource curse hypothesis. Causality results validate the “Conservation hypothesis,” suggesting that the energy sector currently acts as a reactive byproduct rather than a primary driver of development. The study recommends prioritizing domestic grid stabilization and expanding refining capacity to mitigate capital leakage and foster long-term economic resilience.
The study’s unique contribution lies in three key innovations that address the limits of previous regional studies. First, it distinguishes itself from existing literature on the DRC and Sub-Saharan economies by identifying structural breaks endogenously. This allows for the separation of conflict shocks from long-term economic trends. Consequently, data distortion caused by periods of institutional collapse is avoided. This thorough analysis contributes to the broader body of knowledge in resource economics and development research, informing policy decisions and shaping future research directions.
