Industrialization and environmental sustainability in Africa: The moderating effects of renewable and non-renewable energy consumption

Abstract

African countries have become interested in economic transformation through revamping their manufacturing sectors. However, the environmental effect of industrialization is an issue of great concern, with the need to maintain a sustainable environment in line with sustainable development goals. This study investigates the effect of industrialization on environmental sustainability in Africa, taking in to consideration the moderation effect of renewable energy and non-renewable energy consumption. Data was collected for 46 African countries from the Global Footprint Network, World Development Indicators of the World Bank and the Food and Agricultural Organization from 2000 to 2022. Robust panel fixed effects regression and generalized least squares methods were used to analyze the data. The empirical results showed that value added in manufacturing has a negative and significant effect on environmental sustainability. However, when interacted with renewable energy consumption, manufacturing exerted a positive effect on load capacity factor, indicating that the environment will be sustainable if manufacturing sector activities are powered by renewable energies. This suggests that renewable energy has the ability to propel industrial growth in Africa while sustaining the environment. The moderating effect of non-renewable energy and manufacturing is positive in the fixed effects regression and negative for the generalized least squares estimates. This suggest that fossil fuel consumption, particularly clean fossil fuels or natural gas can still drive African manufacturing without considerably harming the environment but continual use of it in to the long run will make the environment unsustainable. From the above results, this study recommends that for sustainable industrialization to take place, Africa should grow her manufacturing sector by extending the range of manufactured products from light to heavy manufactures while ensuring that renewable energy remains the major source of industrial energy supply.