PurposeThis study examines the role of financial development and its interaction with corruption in the environmental degradation of eight Sub-Saharan African countries from 2000–2014.Design/methodology/approachThe study utilizes Pedroni cointegration and fully modified ordinary least squares (FMOLS) techniques for the estimation of the models.FindingsThe results of the cointegration test reveal that there exist long-run relationships among the variables in the model with the interaction of financial development and corruption, and in the model without interaction. The FMOLS estimates show that in the former model, the interaction of financial development with corruption is positively significant in determining the level of environmental degradation in those countries. Moreover, in the latter, financial development, trade openness, and corruption have a positive effect on their environmental degradationResearch limitations/implicationsUnavailability of data, the study was limited to only eight Sub-Saharan African nationsPractical implicationsThe finding that financial development and its interaction with corruption have an adverse effect on the environments of the Sub-Saharan African countries implies the need to focus on how efficient credits are being allocated in those countries. For better management of environmental quality, this may require the implementation of policies that enhance credit allocation to users with energy-efficient technology and appliances that promote the quality of environments. In addition, stringent policies could be embarked upon to curtail all acts of corruption in the region for an efficient credit allocation and a better environment in the development of Sub-Saharan African society.Originality/valueThe dearth in empirical studies on the Sub-Saharan African countries motivates this study. In particular, little is known about the interaction effect of corruption and financial development on the environmental degradation of those countries, as the work on this is limited in the existing literature.

This study examined the effect of financial development, fossil energy use, economic progress, and FDI on environmental pollution in Nigeria from 1981 – 2014 using the ARDL technique. The outcome of the bond test reveals the presence of a long-run association on the variables of the model. The short-run estimate shows that all the variables positively influence CO2. The result of the long-run analysis further indicates that financial progress, fossil fuel, and GDP accelerates the level of CO2 discharge. However, FDI does not explain environmental pollution in Nigeria. Hence, the study suggests that government and policymakers should formulate policies to improve financial development designed to mitigate CO2 discharge by giving directives to financial institutions that all credits allocation should be toward the purchase of low emission technologies and domestic appliances. In addition, environmentalists should enlighten citizens on the danger of environmental pollution and ways to reduce it through public lectures and seminars.

Background: The need to understand the causes of CO2 emissions has prompted the formulation of strategies to prevent global warming. Therefore, the purpose of the study was to determine the input variable that is the most influential in contributing to CO2 emissions and at the same time to forecast the effect of a shock in macroeconomic variables on CO2 emissions for 6 leading African countries over the period of 1970 to 2019. Methods: In this study, the statistical methods of impulse response function and variance decomposition techniques of analysis were used. Results: A one-standard-deviation rise in economic growth leads to an increase in CO2 emissions. A shifts in the square of economic growth increased CO2 emissions, the shock was smaller than that of economic growth. This confirms the theory of environmental Kuznets curve (EKC) in Africa. A shocks to FDI had a positive influence on CO2 emissions. A one standard deviation shock in financial development had an instantaneous positive impact on CO2 emissions. FDI had a greater effect than other factors in explaining CO2 emissions over the short and medium term. In the long run, economic growth contributes the most to CO2 emissions among the explanatory variables. Conclusion: The findings of the study can be used as a reference for international organizations and environmental policymakers in forecasting climate change and assisting in policy decision-making. Africa must boost economic growth through industrial, agricultural, and energy usage patterns and integrate innovation, research, and technology advances into their developmental agenda to fulfil sustainable development goals while lowering CO2 emissions and their consequences.