A modified EKC for sustainability assessment in Sub-Saharan Africa: A panel data analysis

A modified Environmental Kuznets Curve is proposed, where, by substituting the traditional measure of pollution with the level of natural resource depletion and degradation, a more sustainability-oriented EKC model is presented. The focus is placed on a panel data set of 30 Sub-Saharan African (SSA) countries, over a period of thirty-five years (1980-2014). SSA is chosen as the subject of this research, as it is a resource-rich region and is currently one of the world’s fastest-growing regions in terms of foreign direct investment (FDI), especially natural resource seeking, but SSA is also plagued with poor institutional quality and widespread poverty and income inequality. Several studies also associate SSA with a resource curse. The EKC hypothesis is tested for natural resource depletion after controlling several variables pertinent to the SSA region. One of the major findings is that no EKC or inverted U-shape relationship is found between natural resource depletion and the level of economic development. In other words, natural resource depletion does not seem to subside after a given per capita income level is reached for the sampled countries. In addition, the results show that globalisation, which is measured through trade openness, and industrialisation both contribute towards a greater depletion of natural resources and hence have an adverse impact on environmental sustainability for this sample of countries.