An augmented Environmental Kuznets Curve and a new measure of water pollution: an investigation of water pollution in Africa

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Water pollution constitutes an increasingly urgent problem worldwide. This is particularly true for the African continent, which is experiencing high and increasing levels of water pollution. The continent holds great economic growth potential, making it imperative to understand the economic drivers of water pollution to ensure that African countries develop without degrading water quality. This study examines how countries’ income level, trade, and institutional quality affect water pollution across 42 African countries from 2002 to 2016, using newly estimated data on water pollution from the WorldQual model. An augmented Environmental Kuznets Curve (EKC) is employed using static and dynamic panel estimation techniques, specifically cross-section ordinary least squares and fixed effects regressions, and the system generalised method of moments. The static analysis reveals that economic growth initially increases pollution until reaching a turning point between 6244 and 8974 USD of Gross Domestic Product (GDP) per capita, after which pollution levels decrease. Yet, the dynamic analysis suggests the relationship between GDP and pollution is insignificant. Further, the study uncovers that the impact of institutional quality on water pollution depends on the level of trade. Specifically, at high levels of trade, higher institutional quality is associated with less water pollution, while at low levels of trade, higher in institutional quality is associated with more pollution. This study highlights the complex interplay of economic and institutional factors that must be navigated to effectively address the challenge of water pollution in Africa.