The resource curse and the limited transformative capacity of natural resource-based economies in Africa: evidence from the oil and gas sector in Algeria and implications for innovation policy

The strong growth and export performance in Africa for the last decade were largely due to higher international commodity prices and did not translate into the broad-based economic and social development needed to reduce poverty and create jobs for the underemployed. In this paper, we assume that this pattern of development can be explained by the weak nature and narrowness of the learning process that developed in relation to natural resource sectors. Lateral migration of knowledge from the natural resource-based sectors remains scarce in Africa. The paper examines the oil and gas sector in Algeria using the case of the oil giant producer Sonatrach. It shows that knowledge migration benefited internal capacity building and core downstream activities to a certain extent. The capacity of the dominant sector and company to contribute to competence building and innovation in general and specifically in manufacturing activities was, however, very limited and Algeria and, as many other African countries, remains overly dependent on the production and export of oil and gas.