Does natural resource rent and consumption interplay worsen Africa's pollution? Heterogeneous panel approach with cross-sectional dependence

Abstract

It analyses the link between resource rent and consumption patterns on Africa's pollution covering 1990 to 2019. Selecting 31 nations, the study takes cognizance of cross-sectional dependence, necessitating the adoption of Augmented Mean Group (AMG). The robustness of estimates is affirmed using the Common Correlated Effect Mean Group (CCEMG) technique. The result is in three folds. (i) Consumption has a causal effect on pollution; natural resource rent unidirectionally causes consumption, while a feedback effect exists between natural resources and pollution. (ii) Natural resources rent heightens pollution in Africa. (iii) Consumption positively and insignificantly increases pollution the region's pollution. (iv) Lastly, the interplay between consumption and natural resource rent worsens Africa's pollution, meaning that the region has not utilized the enormous foreign exchange from natural resources to aid an eco-friendly consumption pattern. Hence, the study throws into the limelight some pollution control policies centering around using resource wealth to enhance green consumption in Africa.