Economic growth and Environmental Sustainability in Selected African countries: A panel investigation

Abstract

This study examined the effect of economic growth on environmental sustainability among selected African countries. To achieve the objectives of this study economic growth was analysed alongside some control variables - foreign direct investment, credit to the private sector, population growth rate and trade openness to determine their impact on environmental performance index (proxy for environmental sustainability) in the six selected African countries namely: Angola, Algeria, Egypt Ghana, Libya, and Nigeria over the period 1990-2022 using panel analysis. Based on the analysis of the data trend analysis and econometric analysis of panel fixed effect regression econometric technique, some key empirical findings were made. Egypt had the highest environmental performance index (EPI), Direct relationship between the real GDP and environmental performance index (EPI) was visualised in Algeria, Egypt and Libya. Economic growth had a positive and significant impact on the environmental performance index. That FDI and trade openness had positive but marginal effect on environmental performance index while credit to the private sector and population growth rate had negative impact on environmental performance index in the selected countries. Based on the findings, the study recommended increase investment in the real sector and the increase in emission tax in order to sustain the environment in Africa.