Does Natural GasConsumption Enhance a Sustainable Environment in Africa? Empirical Evidence using Panel Analysis

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July 1, 2024

Does Natural GasConsumption Enhance a Sustainable Environment in Africa? Empirical Evidence using Panel Analysis

ABSTRACT:- This effect of natural gas on environmental sustainability among selected African countries was examined in this study. The six selected African countrieswere: Angola, Algeria, Egypt Ghana, Libya, and Nigeria and the study cover the period 1990-2022. To achieve the purpose of this study natural gas consumption was analysed along with foreign direct investment, credit to the private sector, population growth rate, GDP per capita and trade openness to determine their impact on environmental performance index and carbon emission per capita (proxy for environmental sustainability) using panel analysis. Based on the analysis of the data using panel fixed effect regression econometric technique, some key empirical findings were made. Egypt had the highest environmental performance index (EPI) and per capita carbon dioxide (CO2) emission. Algeria consumed more of natural gas than any of the countries selected for the study. Direct relationship between the natural gas consumption and environmental performance index (EPI) was visualised in Algeria, Egypt and Nigeria. Natural gas consumption had a negative and significant impact on the environmental performance index while natural gas consumption had a positive and significant impact on CO2 emission per capita. FDI was found to significantly improve environmental performance while trade openness also improves the performance of the environment but marginally. GDP per capita and credit to the private sector were found to retard environmental performance index in Africa. The study further found that FDI and GDP per capita contributed to environmental degradation significant while credit to the private sector and trade openness marginally destroyed the environment in terms of CO2 emission per capita. Only population growth rate was found to significantly reduced CO2 emission in Africa.Consequent upon the findings, the study concludes that a variation exists in the relative impact of natural gas consumption on environmental sustainability among the selected African countries and that natural gas consumption will more likely be consistent in improving environmental quality and sustainability in Africa. Based on the findings and conclusion, the study recommends: increase investment in natural gas production, consumption and renewable energy by African countries especially renewable energy in order to improve and sustain the environment.

Key words: Natural gas consumption, environmental performance index, carbon emission per capital and Environmental sustainability.

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