Rethinking resource sustainability through economic complexity: A systemic environmental nexus study in Sub-Saharan Africa

Resource depletion in Sub-Saharan Africa (SSA) poses a serious challenge to the region’s development and its ability to achieve global sustainability objectives, particularly those outlined in the Sustainable Development Goals, such as Goal 12 on responsible consumption and production and Goal 15 on life on land. The region’s heavy reliance on natural resources for economic growth and industrialization exacerbates the depletion of these resources, leading to environmental degradation, and heightened socio-economic vulnerabilities. In response to this, economic complexity presents a potential strategy to reduce dependence on resource-intensive sectors and promote sustainable growth. This study explores this strategy, investigating the effect of economic complexity on resource depletion, specifically focusing on energy, forest, and mineral depletion in 33 SSA countries from 1998 to 2022. Employing a variety of methods, including the fixed-effects Driscoll and Kraay estimator, two-step system GMM, IV-GMM, and quantile regression, the results provide strong evidence that greater economic complexity reduces resource depletion, primarily through technological advancement and diversification. The results, robust to a battery of checks, also identify the internet and income as potential transmission channels through which economic complexity may act on resource depletion in the region. Based on these findings, the study recommends policies that foster technological innovation, industrial diversification, and sustainable resource management, alongside financial support for green initiatives, to curb resource depletion while promoting economic resilience.