Effect of Trade and Industrialisation on Environmental Sustainability: The Case of African Countries
| Published date | 01 February 2025 |
| DOI | http://doi.org/10.1177/00157325231204471 |
| Author | Richardson Kojo Edeme,Imide O. Israel,Ekene ThankGod Emeka,Azotani Christain Ogochukwu |
| Date | 01 February 2025 |
Effect of Trade and
Industrialisation
on Environmental
Sustainability:
The Case of
African Countries
Richardson Kojo Edeme1, Imide O. Israel2,
Ekene ThankGod Emeka3 and
Azotani Christain Ogochukwu3
Abstract
This study explores the effect of trade and industrialisation on environmental
sustainability in Africa. To achieve the study objective, the pooled mean group
estimation strategy was employed on data from 1990 to 2019 for 38 selected
African countries. Findings are indicative that trade has a negative and significant
effect on ecological footprint in the long run. It is implied that trade enhancement
has the tendency to enhance environmental sustainability in African countries.
In addition, industrialisation has a positive and significant effect on ecological
footprint. Implied is that industrialisation dampens environmental sustainabil-
ity in African countries. Similarly, foreign direct investment inflows into African
countries exert a positive but insignificant effect on ecological footprint. The
result further depicts that economic growth positively and significantly impacts
ecological footprints in African countries. Also, renewable energy consumption
has a negative and significant effects on ecological footprint, suggesting that the
adoption of renewable energy plays a crucial role in enhancing environmental
sustainability in African countries. The short-run result reveals no significant rela-
tionship between trade, industrialisation, foreign direct investment and ecologi-
cal footprints. Population growth has a positive effect on ecological footprint,
albeit not a statistically significant effect. Furthermore, the result depicts that
renewable energy consumption has a negative and significant effect on ecological
Original Article
Foreign Trade Review
60(1) 33–53, 2025
© 2024 Indian Institute of
Foreign Trade
Article reuse guidelines:
in.sagepub.com/journals-permissions-india
DOI: 10.1177/00157325231204471
journals.sagepub.com/home/ftr
1
Department of Economics, Dennis Osadebay University, Anwai, Asaba, Nigeria
2
Department of Economics, University of Delta, Agbor, Nigeria
3
Department of Economics, University of Nigeria, Nsukka, Nigeria
Corresponding author:
Richardson Kojo Edeme, Department of Economics, Dennis Osadebay University, Anwai, Asaba,
Nigeria.
E-mail: richardson.edeme@dou.edu.ng
34 Foreign Trade Review 60(1)
footprints in African countries. On the strength of the findings, we recommend
the stimulation of domestic trade and the strengthening of industrial policies to
ensure environmental sustainability in African countries.
JEL Codes: C33, F14, F18, R11
Keywords
Trade, industrialisation, environmental sustainability, ecological footprint
Introduction
In economic discourse, trade and industrialisation have been identified as effective
means of accentuating economic growth and development. Several studies, including
Sarkar (2009), Ahmed (2009), Zahonogo (2016), UNCTAD (2016), World Bank
(2018), Jain (2019), Farahane and Heshmat (2020) and Umeh et al. (2022), have pro-
vided a bunch of evidence that while trade engenders growth and poverty reduction
through employment creation and income enhancement, industrialisation drives eco-
nomic progress and development. However, encouraging trade and industrialisation
has several environmental implications. Awudu and Ramcke (2009), Ganesh-Kumar
& Chatterjee (2016), Banerjee (2020) and Opoku and Yan (2019) contend that even
though trade and industrialisation are geared towards the attainment of sustainable
development, they have environmental implications. Available statistics from
UNCTAD (2022) and World Trade Organization (2023) indicates that since 2008,
Africa has maintained a rising trend in inter-regional trade, while total trade to the rest
of the world averaged $760 billion for the period 2015–2018 and total imports stood
at $5,449 billion. The desire to double the industrial gross domestic product (GDP) to
$1.72 trillion by 2025, reduce Africa’s dependence on commodities and contribute to
inclusive growth has spurred the industrialisation process on the continent.
Industrialisation encompasses all extensive efforts towards improving manu-
facturing performance in a country or region. The essence is to transform the
industrial sector to enhance productivity and generate employment. In Africa,
industrial development is of critical importance for sustained and inclusive eco-
nomic growth (ADB, 2023).
The association between trade, industrialisation and environment can be seen
in the fact that industrialisation leads to severe pollution and exploitation of natu-
ral resources, causing severe damage to the environment. The use of chemicals
and fuels in factories increases air and water pollution as well as increases the use
of fossil fuel. The low domestic savings and unfavourable terms of trade have
stagnated investments in the industrial sector below expectations. This constraint
and the dynamics of the process have made African countries dependent on
imports from other developed countries to complement domestic production and
consumption challenges (Bataka, 2021; Mgbemene et al., 2016). African coun-
tries are getting more involved in the ever-dynamic international trade and
industrialisation process, which is assumed to have a deleterious effect on the
environment (Esty, 2001).
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