Natural-resource-driven structural transformation and economic growth: exploring the roles of backward and forward linkages (STEG working paper series, February 2025)
Abstract
In this paper, I examine input-output linkages between industries as a mechanism for natural resource-driven economic development. In 2007, Ghana discovered its most significant column of high-grade offshore oil. I use night-time light data to perform a difference-in-differences analysis, comparing districts heavily dependent on the petroleum industry with other districts before and after the oil discovery. Highly dependent districts are districts in which industries with strong for ward or backward linkages with the oil and gas industry make up a large share of employment. I f ind that oil and gas discovery increased economic activity in these districts. Additionally, highly dependent districts experienced a structural shift in employment from agriculture to services, by passing manufacturing.
Funding
This project was funded by STEG-CEPR
View or download the STEG working paper here
View or download the STEG policy brief here
Natural Resources and Local Communities: Evidence from Ghana’s offshore oil and gas
Abstract
In 2007, Kosmos Energy and Tullow Oil found Ghana’s most significant column of high-grade offshore oil and gas. In this paper, I use geocoded household data to examine the socio-economic effects of this oil and gas discovery on the local communities. I conduct two quasi-experimental analyses and find that the oil and gas discovery increased the local population's income. I also find that the gains in income are higher for skilled workers and non-poor households. However, there is no apparent effect on employment, total consumption expenditure, and poverty.
View or download the working paper here
Natural Resources and the Public's Political Trust
Abstract
Do natural resources affect public trust in political leaders and institutions? In this study, I use a difference-in-differences approach to investigate this question, focusing on Ghana’s discovery of high-grade offshore oil in 2007. I find that individuals living close to the oil fields became less trusting of the political leaders and institutions after the discovery. The findings suggest that the oil discovery’s impact on political trust varies depending on pre-existing social and economic conditions such as educational status, employment status, and the level of media exposure. Additionally, individuals located near the oil fields reported more negative views about Ghana’s democracy, corruption, government performance, and economic conditions. The results suggest a potential link between increased bribe payments in these locations and declining trust.
View or download the working paper here
Extractive Industries and the Missing Linkages: Rethinking Natural Resource-Driven Growth in Africa
This policy brief highlights the disconnect between the large GDP contributions of extractive industries in resource-rich African economies and their weak domestic economic spillovers. It documents the persistence of enclave-style growth despite the expansion of extractive activity.
View or download the policy brief here
Resource price fluctuations, revenue sharing and economic growth
The true cost of free education: analysing the impact on educational outcomes of the free senior high school programme in Ghana
Politics and Local economic growth: evidence from Ghana (with Samuel Obeng)
Extractive Industries, Weak Linkages, and Structural Transformation: Policy Implications of Sectoral Subsidy Choices
Abstract
This project investigates how weak domestic production linkages in extractive industries shape the effectiveness of industrial policy in resource-rich African economies. Using input–output methods and production network analysis, the research examines whether public support for extractive sectors generates meaningful economy-wide growth compared with equivalent support to more interconnected industries. Focusing on Ghana, Nigeria, Zambia, and South Africa, the project uses counterfactual simulations to quantify the domestic growth multipliers associated with sectoral subsidy choices. By linking production network structure to policy returns, the research aims to provide a rigorous framework for evaluating sectoral priorities and understanding why extractive-led growth has struggled to translate into broad-based structural transformation.