Economic Growth, Energy Consumption, and Environmental Degradation in Sub-Saharan Africa: A Dynamic Panel Analysis of the Environmental Kuznets Curve Hypothesis (1999-2025).

This study examines the empirical relationship between economic growth, energy consumption, and environmental degradation across 47 Sub-Saharan African countries from 1999 to 2025. We investigate whether the region’s development trajectory conforms to the Environmental Kuznets Curve (EKC) hypothesis, which predicts an inverted U-shaped relationship between income and carbon emissions, or instead follows alternative patterns such as an N-shaped path where pollution resurges at higher income levels. The analysis also evaluates the Pollution Haven and Pollution Halo hypotheses regarding foreign direct investment (FDI). A quantitative dynamic panel data approach is adopted, employing the core of our methodology, employing the Pooled Mean Group Autoregressive Distributed Lag (PMG-ARDL) estimator. This estimator is chosen because it imposes long-run coefficient homogeneity while allowing short-run heterogeneity across countries, effectively controlling for endogeneity and accommodating variables integrated of mixed orders. We apply second-generation unit root tests and cointegration tests to address cross-sectional dependence. The dependent variable is carbon dioxide (CO₂) emissions per capita, while the primary independent variables include GDP per capita, energy consumption per capita, industrial output, trade openness, and FDI inflows. Renewable energy share, institutional quality, population growth, digitalization, and financial inclusion serve as control variables. Our results confirm a robust long-run equilibrium relationship, indicated by a statistically significant negative error correction term. GDP per capita exerts a positive and significant long-run effect on emissions, suggesting that the scale effect of economic growth currently dominates in Sub-Saharan Africa. Energy consumption emerges as the strongest positive driver of environmental degradation, reflecting the region’s heavy fossil fuel dependency. Critically, renewable energy share acts as a powerful mitigating factor, exhibiting a strong negative and significant coefficient. Industrial output also shows a consistently positive impact on emissions. However, trade openness and FDI inflows yield statistically insignificant or ambiguous effects, highlighting the heterogeneous country-specific contexts where sectoral composition and regulatory stringency vary widely. The primary contribution of this research lies in providing region-specific empirical evidence that challenges the universal applicability of the EKC hypothesis and demonstrates the paramount importance of renewable energy adoption and institutional quality improvement for sustainable development. These findings carry significant implications for policymakers in Sub-Saharan Africa, emphasizing that without deliberate investments in clean energy transitions and strengthened governance structures, economic growth will continue to intensify environmental degradation, thereby compromising the achievement of the Sustainable Development Goals in a climate-vulnerable region.

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