FINANCIAL FLOWS AND ENVIRONMENTAL SUSTAINABILITY IN NIGERIA: ENVIRONMENTAL KUZNETS HYPOTHESIS
Downloads
Introduction: This study examines the effect of financial flows (external and internal) on environmental sustainability in Nigeria, testing the environmental Kuznets hypothesis.
Methods: The study employed secondary data sourced from the Central Bank Statistical Bulletin and World Development indicator. The period of the inquiry was from 1991 to 2022, both years inclusive. The study employed the auto-regressive distributed lag to determine the short and long-run relationship between the outcome variables and explanatory variables.
Results: The findings revealed that external debt, net export and government expenditure on education has a positive significant effect on CO2 emission. Foreign direct investment, foreign aid and tax revenue have a negative significant effect on CO2 emission. It is therefore concluded that external debt and net export channeled through capital project and improvement in receipt from export would increase the units in per capital income of the populace, which in the short-run would increase the level of CO2 emissions in Nigeria.
Conclusion and suggestion: It recommended that government should develop policies and incentives that would attract foreign direct investment in green industries and technologies, ensure foreign companies adhere to environmental regulations and standards in the recipient country.
Adediran, A. (2019). Foreign direct investment and sustainable development in Nigerian aviation. Australasian Review of African Studies, 40(2), 119-133.
Ali, S., Yusop, Z., Kaliappan, S. R., & Chin, L. (2020). Dynamic common correlated effects of trade openness, FDI, and institutional performance on environmental quality: evidence from OIC countries. Environmental Science and Pollution Research, 27(11), 11671-11682.
Ayamba, E. C., Haibo, C., Abdul-Rahaman, A. R., Serwaa, O. E., & Osei-Agyemang, A. (2020). The impact of foreign direct investment on sustainable development in China. Environmental Science and Pollution Research, 27, 25625-25637.
Bokpin, G. A. (2017). Foreign direct investment and environmental sustainability in Africa: The role of institutions and governance. Research in International Business and Finance, 39, 239-247.
CBN (2021). Central Bank of Nigeria Statistical Bulletin. Abuja
Egbetokun, S., Osabuohien, E., Akinbobola, T., Onanuga, O. T., Gershon, O., & Okafor, V. (2020). Environmental pollution, economic growth and institutional quality: exploringthe nexus in Nigeria. Management of Environmental Quality: An International Journal, 31(1), 18-31.
Gershon, O. & Patricia, O. (2019). Carbon (CO2)Footprint Determination: An Empirical Study of families in Port Harcourt, Journal of Physics: Conference Series, 1299, 3rd International Conference on Science and Sustainable Development (ICSSD 2019) "Science, Technology and Research: Keys to Sustainable Development" 6–8 May 2019, Center for Research, Innovation and Discovery, Covenant University, Canaan Land, Ogun State, Ota, Nigeria.
Hakimi, A., & Hamdi, H. (2016). Trade liberalization, FDI inflows, environmental quality and economic growth: a comparative analysis between Tunisia and Morocco. Renewable and Sustainable Energy Reviews, 58, 1445-1456.
Hitam, M.B., & Borhan, H.B. (2012). FDI, growth and the environment: impact on quality of life in Malaysia. Procedia - Social Behavioral Sciences, 50, 333–342.
Iheanachor, N., & Ozegbe, A. E. (2021). An assessment of foreign direct investment and sustainable development nexus: The Nigerian and Ghanaian perspectives. International Journal of Management, Economics and Social Sciences (IJMESS), 10(1), 49-67.
Ofierohor, U.E., Ohale, L., & Nkoro, E. (2022). Foreign Inflows and Economic Development in Nigeria: An ARDL and Novel Dynamic ARDL Simulation Approach. Asian Journal of Economics, Finance and Management, 4(1), 482-493
Ogbeide, S. O., & Ugbogbo, S.N. (2022). Empirical Assessment of Carbon Foot Print on The Economic Growth Of Nigeria. Sapientia Global Journal of Arts, Humanities and Development Studies (SGOJAHDS), 5(3), 209– 223.
Rahman, M.M., Ahmed, R., Mashud, A.H.M., Malik, A.I.,Miah, S., & Abedin, M.Z. (2022). Consumption-based CO2 emissions on sustainable development goals of SAARC Region. Sustainability, 14, 1467.https://doi.org/10.3390/su14031467
Ren, S., Yuan, B., Ma, X., & Chen, X. (2014). International trade, FDI (foreign direct investment) and embodied CO2 emissions: A case study of Chinas industrial sectors. China Economic Review, 28, 123-134.
Ridzuan, A.R., Ismail, N.A., & Che Hamat, A.F.C. (2017). Does foreign direct investment successfully lead to sustainable development in Singapore? Economies, 5(3), 29.
Ridzuan, A.R., Ismail, N.A., & Hamat, A.F.C. (2018). Foreign direct investment and trade openness: Do they lead to sustainable development in Malaysia. Journal of Sustainability Science and management, 4, 79-97.
Sane, M., Hajek, M., Phiri, J., Babangida, J.S., & Nwaogu, C. (2022). Application of decoupling approach to evaluate electricity consumption, agriculture, GDP, crude oil production, and CO2 emission nexus in support of economic instrument in Nigeria. Sustainability, 14(6), 3226.
Shaari, M.S., Hussain, N.E., Abdullah, H., & Kamil, S. (2014). Relationship among foreign direct investment, economic growth and CO2 emission: a panel data analysis. International Journal of Energy Economics and Policy, 4(4), 706-715.
World Bank (2020). World development indicators & global development finance; 2010. Available:http://data.worldbank.org/datacatalog/world-development-indicators/
Voica, M.C., Panait, M., & Haralambie, G.A. (2015). The Impact of Foreign Direct Investment on Sustainable Development. Petroleum-Gas University of Ploiesti Bulletin, Technical Series, 67(3).
Yusof, I., Ambak, A., Yamin, S., & Awang, N. (2019). The Effect of Foreign Direct Investment on Sustainable Development ASEAN 3 and ASEAN 5: A Conceptual Study. In Proceedings of the 1st International Conference on Finance Economics and Business, ICOFEB 2018, 12-13 November 2018, Lhokseumawe, Aceh, Indonesia.
Zafar, M.W., Saleem, M.M., Destek, M.A., & Caglar, A.E. (2022). The dynamic linkage between remittances, export diversification, education, renewable energy consumption, economic growth, and CO2 emissions in top remittance‐receiving countries. Sustainable Development, 30(1), 165-175.
Zubair, A.O., Samad, A.R.A., & Dankumo, A.M. (2020). Do gross domestic income, trade integration, FDI inflows, GDP, and capital reduce CO2 emissions? An empirical evidence from Nigeria. Current Research in Environmental Sustainability, 2, 100009.
Copyright (c) 2025 Mayowa Ebenezer Ariyibi, Bamidele Muzliu Ilo, Ganiyu Olumuyiwa Yinusa
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with Jurnal Ekonomi dan Bisnis Airlangga agree to the following terms:The journal allows the author to hold the copyright of the article without restrictions.
The journal allows the author(s) to retain publishing rights without restrictions
The legal formal aspect of journal publication accessibility refers to Creative Commons Attribution Share-Alike (CC BY-SA).
Jurnal Ekonomi dan Bisnis Airlangga (JEBA) is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License
