Transparency and Global Initiatives in the Face of Natural Resource Depletion in Sub-Saharan Africa

Abstract

This research focuses on Natural Resource Depletion in Sub-Saharan Africa, as well as ways to overcome it, with a particular focus on the role of transparency in Sub-Saharan Africa (SSA). The transparency initiative is a global initiative aimed at eradicating corruption, ensuring accountability, and assisting participating countries in developing quality budgets that will ensure a good standard of living for their citizens now and in the future. Hausman test was applied and a fixed panel regression model was specified which reveals that there is a significant relationship between GDP per capita, inflation, the EITI dummy, and the transparency indicator is established using a panel regression model. The results show that the model fits the data well and can be used to forecast future economic growth in SSA countries that participate in the EITI scheme. The fixed-effect model also shows that the Transparency indicators such as voice and accountability, and corruption have a positive significant impact on the economic growth of the 10 SSA countries under consideration, indicating that transparency is a critical factor in determining good economic performance. Meanwhile, diagnostic tests such as normality test was performed, with satisfactory results, indicating that the model is very robust and reliable. Meanwhile, inflation have positive significant impact while natural resources show a negative significant influence on the economic growth of all the 10 Sub-Saharan Africa (SSA) in the EITI scheme which can be attributed to the natural economic depletion. Then, using correlation analysis, it was discovered that there is a strong link between transparency indicators (voice and accountability, corruption as well as quality of budget, and fiscal management) and economic growth. This suggests that the greater the transparency, the more natural resource constraints will be overcome, and SSA countries participating in the EITI scheme will achieve greater economic performance.