An empirical assessment of the tripartite nexus between environmental pollution, economic growth, and agricultural production in Sub-Saharan African countries.

Abstract

A lot of attention has been paid to environmental pollution worldwide, due to the increase in anthropogenic activities. Massive investment in non-renewable energy options raises questions regarding environmental sustainability and how to maximize food and non-food output while still preserving a healthy ecosystem. To this end, the present study explores the three-way nexus between economic growth, CO2 emission, and agriculture-value added will accounting for other control variables across a balanced panel of selected African economies from 1997 to 2020. Panel econometrics method of the generalized method of moments (two-step difference GMM) is used to obtain a robust result. From the present study, the environmental pollution model shows that economic growth significantly contributes to environmental pollution in Africa. Additionally, the food price index, capital, and FDI promote pollution, while agricultural production and labor decrease pollution. In the case of the economic growth model, the findings reveal that environmental pollution supports the growth-led pollution hypothesis. Also, the food price index and capital ameliorate economic growth, while foreign direct investments decrease economic growth. Finally, the agricultural production model indicates that economic growth increases agricultural production when the interaction term between GDPC and FDI is included in the model. In summary, the combination of explanatory variables, environmental pollution, capital, and foreign direct investment decreases agricultural production. On the contrary, the food price index and labor promote agricultural production in Africa. Furthermore, the study provides a lot of policies for authorities and stakeholders in Sub-Saharan African countries and other developing economies.