CO2 Emissions, Legal Strength & Environmental Sustainability Policies; And FDI Nexus In Sub-Saharan Africa

Abstract

The study employed the two steps systems GMM technique to examine the effect of FDI inflow in 54 countries in Africa from 2004 -2020. The effects of FDI on the economy and growth are positive, provided that policymakers meet minimum conditions. The advantages of FDI are conditioned by the ability of the host country to assimilate technologies and by a local environment that is secure and transparent. The effects of FDI on the environment are inescapable. The results show that there is indeed a positive relationship between FDI inflows and CO2 emissions in Africa. The results also show that the intensity of CO2 emissions does depend on the increase in GDP growth (economic growth). However, with robust, sustainable environmental policies and legal quality, the effect of FDI inflow on CO2 emissions can be mitigated.