In this paper, we investigate the link between windfall gains and losses of income associated with commodity exports and economic performance in a panel of 45 sub-Saharan African (SSA) countries over the period from 1990 to 2019. Windfall gains and losses of income are measured in terms of fluctuations in a country-specific commodity terms of trade (CTOT) index in which each commodity is weighted by the ratio of exports of that commodity in the country’s gross domestic product (GDP). The CTOT index therefore reflects the commodity export specialisation for individual countries. The data on CTOT are taken from the International Monetary Fund. Additionally, we use changes in real GDP per capita as our SSA economic performance measure. We employ a random coefficient model that yields individual estimates for each of the countries included in the analysis. Our approach is based on the assumption that the effect of windfall gains and losses on real GDP per capita growth varies across different SSA countries. Our main conclusion can be elaborated as follows: first, natural resources have undoubtedly contributed to higher economic growth in SSA countries since 1990. Second, when SSA countries are analytically divided into two groups depending on their commodity export specialisation, we find that resource-rich countries—in particular oil rich—are the best economic growth performers during the observation period. Finally, we find that windfall gains from commodity exports are not significantly associated with increased real GDP per capita growth in most agriculture-exporting countries.

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This article investigates aid delivery channels and their potential contribution to state-capacity-building in sub-Saharan African (SSA) fragile and conflict-affected states (FCSs) by drawing on the New Deal for Engagement in Fragile States. Using the synthetic control method (SCM), the paper examines whether donors have implemented foreign aid following their commitment to the New Deal. It focuses on the period 2005-2019 and 44 SSA countries. Overall, the findings show that less aid is delivered through the public sector in FCSs, where building state capability is more necessary than in non-FCSs in SSA. This shows that donor foreign aid practices do not match their commitment to the New Deal for Engagement in Fragile States, although there are significant differences in donor practices. The tendency in donor aid-giving is to bypass the public sector, which does not necessarily help strengthen capacity in FCSs. It is a paradox of foreign aid to fragile states due to the contradiction between the short-term effectiveness of foreign aid and the long-term necessity of state-building in FCSs. With these findings, the paper calls for international efforts to improve aid-giving to support state capability in FCSs. Policy Implications• In general, donors do not favour or discriminate against Sub-Saharan African countries in terms of total amounts of bilateral aid on the basis of their fragility status. However, donor foreign aid practices do not match their commitment to engage directly with recipient governments and show respect for their programming, systems, and staff. This is a paradox of foreign aid due to the contradiction between the short-term effectiveness of foreign aid and the long-term necessity of statebuilding in fragile states. • Despite the fact that effectiveness may increase in the short term, practices which consist of bypassing will undermine opportunities for fragile states' governments to strengthen their capability. Donors need to combine specific efforts such as supporting public sector reforms and technical capacity-building. • On the other hand, fragile states' governments need to show willingness to enhance the transparency and efficiency of their public sector to increase the number of possibilities through which donors can use public sector channels for foreign aid delivery. • It is necessary to devise better strategies to combine the short-term effectiveness of foreign aid and the long-term necessity of state-building in fragile states. It is an urgent task since the development situations in the majority of these countries are becoming humanitarian disasters that pose global threats in terms of regional security and stability.

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