The synergistic role of natural resources, green finance and green technological innovations in promoting environmental sustainability in Sub-Saharan Africa

Abstract

The general belief that natural resources are a curse in developing nations, where they are available in abundance because of political instability and corruption problems, is a cause of concern. This research adds to the growing body of knowledge by showing that natural resources rents support environmental sustainability. The study also investigates the influence of technological innovation, with an index generated with the Principal Component Analysis, financial development and Green Finance on environmental sustainability. The data of the forty-three Sub-Saharan African nations according to data availability for the period 2000 to 2023 is used. The Methods of Moments Quantile Regression technique is used in the analysis; thereby presenting reliable findings where heterogeneity and cross-sectional dependency issues are present. To check the findings robustness, the Panel Correlated Standard Errors and Feasible Generalized Least Squares techniques are employed. The research findings show that natural resources rents lower ecological footprint; hence, reduces the deterioration of the environment. This contradicts the notion that natural resources are a curse in the developing nations. Green finance and renewable energy are fundamental in ensuring the achievement of environmental quality. Moreover, financial development only supports environmental sustainability in the short-term and become detrimental in the long-term. However, technological innovations and government effectiveness promotes the deterioration of the environment through raising ecological footprint. Major policy recommendations call for the improvement in the natural resources for supporting environmental sustainability. International funds received to support green technologies should be used for the intended purpose and this can be achieved by lowering corruption levels.