The impact of the mining industry on economic growth in the countries of the Southern African region

The authors investigate the relationship between the mining industry and economic growth in South African countries. The countries in the Southern African region are rich in natural resources, and in most of them, their mining industry extracts and exports natural resources with little industrial processing. The empirical methodology involved the use of ordinary least squares and generalized method of moments. The results are based on a dataset of twelve countries in the Southern African region from 2011 to 2020. The direct and indirect impacts of the mining industry in Southern African countries on their economic growth are analyzed. The economic growth model used data on real growth in the mining industry, the share of exports of minerals in total exports, real growth of manufacturing, human capital development, population growth, mineral resource endowments, infrastructure development, real growth in services, trade volumes, and openness and growth of foreign direct investment. Findings showed that real growth in the service sector, manufacturing, mining, human capital development, infrastructure development, trade openness, and growth in foreign direct investment are important determinants of economic growth in economies of the Southern African region during the study period. The resource curse hypothesis has not been confirmed. Therefore, to improve economic growth, it is advisable for countries in the Southern African region to improve their government institutions and regulatory frameworks to attract investment in the strategic mining sector. The recommendations are made regarding the formation of state industrial policies.