Analyses on environment and economic development in Africa

Abstract

This dissertation explores how African economies can pursue robust growth while protecting their environment. Using country-level panels and modern econometrics, it evaluates how globalization, financial development, green innovation, renewable energy, institutional strength and external shocks jointly shape the growth–environment nexus. Chapter 1 employs two-step system-GMM on fifty-two countries (1997–2021) and finds that economic and social globalization and deeper financial institutions initially raise carbon emissions through trade expansion and industrialisation, whereas financial markets are neutral because green finance is scarce. Non-linear estimates reveal Environmental Kuznets Curve behaviour for economic and social globalization and for overall financial development, but political globalization follows a U-shaped path. Chapter 2 constructs an Africa-specific composite green-growth index combining economic, environmental and institutional pillars and estimates PMG, MG and DFE models for forty-nine countries during 2000–2021. Long-run results show that green innovation, renewable-energy deployment, strong institutions, higher income and trade openness promote green growth, whereas foreign direct investment and natural-resource reliance hinder it. In the short run only institutional quality and income remain supportive, highlighting the early importance of governance reform. Chapter 3 uses linear ARDL and nonlinear NARDL models for ten Sub-Saharan states (1991–2023) to assess how economic-policy uncertainty, oil prices and FDI influence both carbon emissions and ecological footprints. Short-run policy uncertainty widens footprints by delaying green investment, yet long-run stability reduces environmental pressure. Higher oil prices and persistent FDI inflows steer production toward cleaner technologies, whereas price collapses and abrupt FDI surges initially aggravate pollution. Asymmetric tests show that positive shocks generally intensify environmental stress, while negative shocks alleviate it. Overall, the thesis delivers an Africa-tailored roadmap indicating that integrated trade, financial, innovation and energy policies, anchored in strong institutions, can achieve inclusive low-carbon development resilient to global volatility. Policy recommendations emphasise green finance, trade liberalisation and adaptive governance capable of absorbing external disturbances.