Economic Policy and Sustainable Development in Sub-Saharan Africa: The Roles of Financial Access, Green Technology, and Trade Openness — Oak Academic Publishing
Research ArticleOpen AccessGoogle Scholar indexed
Economic Policy and Sustainable Development in Sub-Saharan Africa: The Roles of Financial Access, Green Technology, and Trade Openness
School of Finance and Economics, Jiangsu University, Zhenjiang, China
,
School of Finance and Economics, Jiangsu University, Zhenjiang, China
,
School of Finance and Economics, Jiangsu University, Zhenjiang, China
,
Business School, Wuxi Taihu University, Wuxi, China
1 School of Finance and Economics, Jiangsu University, Zhenjiang, China
2 School of Finance and Economics, Jiangsu University, Zhenjiang, China
3 School of Finance and Economics, Jiangsu University, Zhenjiang, China
4 Business School, Wuxi Taihu University, Wuxi, China
Achieving sustainable development remains a major challenge in Sub-Saharan Africa (SSA), despite periods of economic growth and increasing policy interventions across the region. While existing studies have examined the role of fiscal, monetary, and environmental policies independently, limited attention has been given to how these policy dimensions jointly relate to sustainable development and through which mechanisms their effects operate. Using annual panel data for five selected SSA economies from 2005 to 2020, this study examines the relationship between economic policy and sustainable development within a nonlinear and mechanism-based framework. The analysis employs hierarchical regression techniques to assess direct effects, mediation channels, and moderation dynamics. The findings indicate that fiscal and monetary policy exhibit diminishing effects on sustainable development, suggesting that the effectiveness of policy expansion may weaken as intervention intensifies. Environmental pressure, however, is positively associated with sustainable development outcomes. The results further show that access to credit partially mediates the relationship between monetary policy and sustainable development, while green technology serves as a transmission channel linking environmental pressures to sustainable development. In addition, trade openness moderates the relationship between fiscal policy and sustainable development. The findings suggest that policy effectiveness depends not only on the scale of intervention but also on financial access, technological adaptation, and external economic integration.
KeywordsEconomic PolicySustainable DevelopmentFiscal PolicyMonetary PolicyGreen TechnologyAccess to CreditTrade OpennessSub-Saharan Africa
Abdullah, H., Habibullah, M. S., & Baharumshah, A. Z. (2020). Fiscal Policy, Institutions, and Economic Growth in Asian Countries: Evidence from Pedroni’s Cointegration Approach. Malaysian Management Journal, 12, 117-135. https://doi.org/10.32890/mmj.12.1-2.2008.8956
Abrego, M. L., de Zamaroczy, M. M., Gursoy, T., Nicholls, G. P., Perez-Saiz, H., & Rosas, J.-N. (2020). The African Continental Free Trade Area: Potential Economic Impact and Challenges . International Monetary Fund. https://books.google.com/books?hl=en&lr=&id=CrAYEAAAQBAJ&oi=fnd&pg=PA5&dq=AfCFTA+necessitates+governments+to+adapt+fiscal+policies+to+address+challenges+like+increased+competition,+potential+revenue+shortfalls,+and+the+need+for+infrastruc-ture+development&ots=8zzhgDPMp8&sig=Mnw1N_Q6esujweLbxT9qtc6PcMg
Adeleye, B. N. (2023). Income Inequality, Human Capital and Institutional Quality in Sub-Saharan Africa. Social Indicators Research, 171, 133-157. https://doi.org/10.1007/s11205-023-03244-0
African Development Bank (2018). African Economic Outlook (AEO) 2018 [Text] . Afri-can Development Bank Group. https://www.afdb.org/en/documents/document/african-economic-outlook-aoe-2018-99877
African Development Bank Group (2023). Africa’s Macroeconomic Performance and Outlook . https://www.afdb.org/sites/default/files/documents/publications/africas_macroeconomic_performance_and_outlook_2023_1.pdf
African Union (2020). African Continental Free Trade Area . African Union. https://exportkzn.co.za/resources/docs/AfCFTA/AfCFTA_Q_&_A.pdf
Agyei, S. K., & Idan, G. A. (2022). Trade Openness, Institutions, and Inclusive Growth in Sub-Saharan Africa. Sage Open, 12 . https://doi.org/10.1177/21582440221099008
Aiken, L. S., West, S. G., & Reno, R. R. (1991). Multiple Regression: Testing and Interpreting Interactions . Sage. https://books.google.com/books?hl=en&lr=&id=LcWLUyXcmnkC&oi=fnd&pg=PP11&dq=Aiken+and+West+(1991)&ots=fqceWhWT3g&sig=bdonse0sBDwqYbPnzLODvIMuhgQ
Aldieri, L., & Vinci, C. P. (2018). Green Economy and Sustainable Development: The Economic Impact of Innovation on Employment. Sustainability, 10, Article No. 3541. https://doi.org/10.3390/su10103541
Al-Saidi, M. (2019). Environmental Policy and Sustainable Development. In W. Leal Filho (Ed.), Encyclopedia of Sustainability in Higher Education (pp. 619-626). Springer International Publishing. https://doi.org/10.1007/978-3-030-11352-0_434
Andriamahery, A., Danarson, J. H., & Qamruzzaman, M. (2022). Nexus between Trade and Environmental Quality in Sub-Saharan Africa: Evidence from Panel GMM. Frontiers in Environmental Science, 10, Article ID: 986429. https://doi.org/10.3389/fenvs.2022.986429
Anwar, M., Khattak, M. S., Popp, J., Meyer, D. F., & Máté, D. (2020). The Nexus of Government Incentives and Sustainable Development Goals: Is the Management of Resources the Solution to Non-Profit Organisations? Technological and Economic Development of Economy, 26, 1284-1310. https://doi.org/10.3846/tede.2020.13404
Apergis, N., & Cooray, A. (2016). Old Wine in a New Bottle: Trade Openness and FDI Flows—Are the Emerging Economies Converging? Contemporary Economic Policy, 34, 336-351. https://doi.org/10.1111/coep.12122
Asongu, S. A. (2018). Comparative Sustainable Development in Sub-Saharan Africa. Sustainable Development, 26, 638-651. https://doi.org/10.1002/sd.1733
Asongu, S. A., & Odhiambo, N. M. (2021). Enhancing Governance for Environmental Sustainability in Sub-Saharan Africa. Energy Exploration & Exploitation, 39, 444-463. https://doi.org/10.1177/0144598719900657
Baron, R. M., & Kenny, D. A. (1986). The Moderator-Mediator Variable Distinction in Social Psychological Research: Conceptual, Strategic, and Statistical Considerations. Journal of Personality and Social Psychology, 51, 1173-1182. https://doi.org/10.1037/0022-3514.51.6.1173
Bernanke, B. S., & Gertler, M. (1995). Inside the Black Box: The Credit Channel of Monetary Policy Transmission. Journal of Economic Perspectives, 9, 27-48. https://doi.org/10.1257/jep.9.4.27
Bie, Q., Wang, S., Qiang, W., Ma, X., Gu, Z., & Tian, N. (2023). Progress toward Sustainable Development Goals and Interlinkages between Them in Arctic Countries. Heliyon , 9, e13306. https://doi.org/10.1016/j.heliyon.2023.e13306
Bilal, M. (2019). Does the Export Sector Generate Positive Externality for the Non-Tradable Sector? The Case of Bangladesh, India & Pakistan . https://www.diva-portal.org/smash/record.jsf?pid=diva2:1349034
Bombardini, M., & Li, B. (2020). Trade, Pollution and Mortality in China. Journal of International Economics, 125, Article ID: 103321. https://doi.org/10.1016/j.jinteco.2020.103321
Branstetter, L., & Maskus, K. E. (2022). Global Knowledge Flows, Absorptive Capacity and Capability Acquisition: Old Ideas, Recent Evidence and New Approaches. In A. Taubman, & J. Watal (Eds.), Trade in Knowledge : Intellectual Property, Trade and Development in a Transformed Global Economy (pp. 405-430). Cambridge University Press. https://doi.org/10.1017/9781108780919.017
Brunnermeier, M., & Landau, J.-P. (2022). Finance, Money, and Climate Change. In 74th Economic Policy Panel Meeting (pp. 1-12). https://www.economic-policy.org/wp-content/uploads/2021/10/9104_BrunnermaierLandau.pdf
Calderón, C., & Nguyen, H. (2016). The Cyclical Nature of Fiscal Policy in Sub-Saharan Africa. Journal of African Economies, 25, 548-579. https://doi.org/10.1093/jae/ejw007
Cardinale, I., & Scazzieri, R. (2018). Political Economy: Outlining a Field. In I. Cardinale, & R. Scazzieri (Eds), The Palgrave Handbook of Political Economy (pp. 1-25). Palgrave Macmillan UK. https://doi.org/10.1057/978-1-137-44254-3_1
Chen, Y. (2018). Comparing North-South Technology Transfer and South-South Technology Transfer: The Technology Transfer Impact of Ethiopian Wind Farms. Energy Policy, 116, 1-9. https://doi.org/10.1016/j.enpol.2017.12.051
Chugunov, I., Pasichnyi, M., Koroviy, V., Kaneva, T., & Nikitishin, A. (2021). Fiscal and Monetary Policy of Economic Development. European Journal of Sustainable Development, 10, 42. https://doi.org/10.14207/ejsd.2021.v10n1p42
Clark, B. (2016). Political Economy: A Comparative Approach (3rd Edition). Bloomsbury Publishing USA. https://books.google.com/books?hl=en&lr=&id=RozDEAAAQBAJ&oi=fnd&pg=PP1&dq=%E2%80%98Political+Economy%E2%80%99&ots=AxguKXIU2B&sig=oYRLBjmsDULkiEGKVfpZHZHff6o
Coscieme, L., Mortensen, L. F., & Donohue, I. (2021). Enhance Environmental Policy Coherence to Meet the Sustainable Development Goals. Journal of Cleaner Production, 296, Article ID: 126502. https://doi.org/10.1016/j.jclepro.2021.126502
Dasgupta, P. (2021). The Economics of Biodiversity: The Dasgupta Review . Hm Treasury. https://www.gov.uk/government/publications/final-report-the-economics-of-biodiversity-the-dasgupta-review
Decancq, K., & Lugo, M. A. (2013). Weights in Multidimensional Indices of Wellbeing: An Overview. Econometric Reviews, 32, 7-34. https://doi.org/10.1080/07474938.2012.690641
Donkor, M., Kong, Y., & Manu, E. K. (2024). Natural Resource Abundance, Governance, and Government Expenditure: Empirical Insights from Environmental Sustainability. Sustainable Development, 33, 733-757. https://doi.org/10.1002/sd.3116
Donkor, M., Kong, Y., Manu, E. K., Ntarmah, A. H., & Appiah-Twum, F. (2022). Economic Growth and Environmental Quality: Analysis of Government Expenditure and the Causal Effect. International Journal of Environmental Research and Public Health, 19, Article No. 10629. https://doi.org/10.3390/ijerph191710629
El Husseiny, I. A. (2020). Enhancing the Role of Fiscal Policy in Achieving the Sustainable Development Goals (SDGs): Insights from Behavioral Economics with a Special Reference to Egypt. European Journal of Economics, Finance and Administrative Sciences, No. 106 , 22-43. https://www.researchgate.net/profile/Israa-El-Husseiny/publication/344818526_FiscalPoli-cy_SDGs_BehavioralEconomicspdf/data/5f91abe292851c14bcdebcb4/FiscalPolicy-SDGs-BehavioralEconomics.pdf
Fotis, P., & Polemis, M. (2018). Sustainable Development, Environmental Policy and Renewable Energy Use: A Dynamic Panel Data Approach. Sustainable Development, 26, 726-740. https://doi.org/10.1002/sd.1742
Fujii, E. (2019). What Does Trade Openness Measure? Oxford Bulletin of Economics and Statistics, 81, 868-888. https://doi.org/10.1111/obes.12275
Gramkow, C. (2020). Green Fiscal Policies: An Armoury of Instruments to Recover Growth Sustainably . https://repositorio.cepal.org/entities/publication/05b91260-a4f7-41a9-bf36-f67552f98c56
Greco, S., Ishizaka, A., Tasiou, M., & Torrisi, G. (2019). On the Methodological Framework of Composite Indices: A Review of the Issues of Weighting, Aggregation, and Robustness. Social Indicators Research, 141, 61-94. https://doi.org/10.1007/s11205-017-1832-9
Guo, M., Nowakowska-Grunt, J., Gorbanyov, V., & Egorova, M. (2020). Green Technology and Sustainable Development: Assessment and Green Growth Frameworks. Sustainability, 12, Article No. 6571. https://doi.org/10.3390/su12166571
Gupta, H. (2014). Public Expenditure and Economic Growth: Econometric Models from Developing Countries . Ph.D. Thesis, Dayalbagh Educational Institute (Deemed University).
Hafezi, M., & Zolfagharinia, H. (2018). Green Product Development and Environmental Performance: Investigating the Role of Government Regulations. International Journal of Production Economics, 204, 395-410. https://doi.org/10.1016/j.ijpe.2018.08.012
Hamdi, H., & Hakimi, A. (2022). Trade Openness, Foreign Direct Investment, and Human Development: A Panel Cointegration Analysis for MENA Countries. The International Trade Journal, 36, 219-238. https://doi.org/10.1080/08853908.2021.1905115
Hayes, A. F. (2022). Introduction to Mediation, Moderation, and Conditional Process Analysis: Third Edition: A Regression-Based Approach (3rd ed.). The Guilford Press. https://www.guilford.com/books/Introduction-to-Mediation-Moderation-and-Conditional-Process-Analysis/Andrew-Hayes/9781462549030
Hickel, J. (2020). The Sustainable Development Index: Measuring the Ecological Efficiency of Human Development in the Anthropocene. Ecological Economics, 167, Article ID: 106331. https://doi.org/10.1016/j.ecolecon.2019.05.011
Hsu, C., Quang-Thanh, N., Chien, F., Li, L., & Mohsin, M. (2021). Evaluating Green Innovation and Performance of Financial Development: Mediating Concerns of Environmental Regulation. Environmental Science and Pollution Research, 28, 57386-57397. https://doi.org/10.1007/s11356-021-14499-w
Irandoust, M. (2020). The Effectiveness of Monetary Policy and Output Fluctuations: An Asymmetric Analysis. Australian Economic Papers, 59, 161-181. https://doi.org/10.1111/1467-8454.12177
Jakob, M., Flachsland, C., Christoph Steckel, J., & Urpelainen, J. (2020). Actors, Objectives, Context: A Framework of the Political Economy of Energy and Climate Policy Applied to India, Indonesia, and Vietnam. Energy Research & Social Science, 70, Article ID: 101775. https://doi.org/10.1016/j.erss.2020.101775
Kara, A., Zhou, H., & Zhou, Y. (2021). Achieving the United Nations’ Sustainable Development Goals through Financial Inclusion: A Systematic Literature Review of Access to Finance across the Globe. International Review of Financial Analysis, 77, Article ID: 101833. https://doi.org/10.1016/j.irfa.2021.101833
Lectard, P., & Rougier, E. (2018). Can Developing Countries Gain from Defying Comparative Advantage? Distance to Comparative Advantage, Export Diversification and Sophistication, and the Dynamics of Specialization. World Development, 102, 90-110. https://doi.org/10.1016/j.worlddev.2017.09.012
Lledó, V. D., Yackovlev, I., & Gadenne, L. (2011). A Tale of Cyclicality, Aid Flows and Debt: Government Spending in Sub-Saharan Africa. Journal of African Economies, 20, 823-849. https://doi.org/10.1093/jae/ejr022
Malefane, M. R. (2018). Impact of Trade Openness on Economic Growth: Empirical Evidence from South Africa . https://www.researchgate.net/profile/Nicholas-Odhiambo/publication/325130173_Impact_of_Trade_Openness_on_Economic_Growth_Empirical_Evidence_from_South_Africa/links/5af9ce04aca272e730289829/Impact-of-Trade-Openness-on-Economic-Growth-Empirical-Evidence-from-South-Africa.pdf
Manu, E. K., Chen, G. S., & Adomako, S. (2024). Do Environmental Regulations and Technological Innovation Enhance Environmental Well-Being in Sub-Saharan Africa? Business Strategy and the Environment, 33, 5736-5752. https://doi.org/10.1002/bse.3772
Marimuthu, R., Sankaranarayanan, B., Ali, S. M., Jabbour, A. B. L. d. S., & Karuppiah, K. (2021). Assessment of Key Socio-Economic and Environmental Challenges in the Mining Industry: Implications for Resource Policies in Emerging Economies. Sustainable Production and Consumption, 27, 814-830. https://doi.org/10.1016/j.spc.2021.02.005
Miller, D. C., Scales, I. R., & Mascia, M. B. (2023). Conservation Social Science: Understanding People, Conserving Biodiversity . John Wiley & Sons. https://books.google.com/books?hl=en&lr=&id=Q3apEAAAQBAJ&oi=fnd&pg=PR9&dq=environmental+policy+helps+protect+and+preserve+biodiversity+&ots=KBTw1Lvkmc&sig=DEyIFAzhU8o0zr0OpJJo8LS4_uA
Mishkin, F. (2018). Economics of Money, Banking and Financial Markets, The (12th ed.). Pearson.
Nardo, M., Saisana, M., Saltelli, A., & Tarantola, S. (2005). Tools for Composite Indicators Building . https://publications.jrc.ec.europa.eu/repository/handle/JRC31473
Ngumbi, A. M., Waweru, G., & Rita, L. (2020). Influence of Lending Procedures on Credit Accessibility amongst Small and Micro Enterprises in Kenya: A Case of Meru Town. East African Journal of Business and Economics, 2, 84-94. https://doi.org/10.37284/eajbe.2.1.253
Nordheim, O., & van der Wel, K. A. (2025). Are There Diminishing Returns to Social Spending? Social Policy, Health and Health Inequalities in European Countries. A Comparative Longitudinal Survey Data Analysis. Social Science & Medicine, 380, Article ID: 117721. https://doi.org/10.1016/j.socscimed.2025.117721
North, D. C. (2018). Institutional Change: A Framework of Analysis. In Social Rules (pp. 189-201). Routledge. https://doi.org/10.4324/9780429497278-13
Nuru, N. Y., & Gereziher, H. Y. (2022). The Effect of Fiscal Policy on Economic Growth in South Africa: A Nonlinear ARDL Model Analysis. Journal of Economic and Adminis trative Sciences, 38, 229-245. https://doi.org/10.1108/jeas-06-2020-0088
Ofoegbu, G. N., Akwu, D. O., & O, O. (2016). Empirical Analysis of Effect of Tax Revenue on Economic Development of Nigeria. International Journal of Asian Social Science, 6, 604-613. https://doi.org/10.18488/journal.1/2016.6.10/1.10.604.613
Oppong-Baah, T., Bo, Y., Twi-Brempong, C., Amoah, E. O., Prempeh, N. A., & Addai, M. (2022). The Impact of Trade Openness on Economic Growth: The Case of Ghana and Nigeria. Journal of Human Resource and Sustainability Studies, 10, 142-160. https://doi.org/10.4236/jhrss.2022.101010
Oyetade, D., Obalade, A. A., & Muzindutsi, P.-F. (2022). Changes in Basel Capital Requirements and Lending Ability of African Commercial Banks. Journal of Central Banking Theory and Practice, 11, 179-201. https://doi.org/10.2478/jcbtp-2022-0029
Pandula, G. (2013). An Empirical Investigation of Small and Medium Enterprises’ Access to Finance: The Case Study of Emerging Economy. In ASBBS Annual Conference (Vol. 18, p. 18). Las Vegas.
Park, J. K., & Meng, X. (2024). Crowding Out or Crowding In? Reevaluating the Effect of Government Spending on Private Economic Activities. International Review of Economics & Finance, 89, 102-117. https://doi.org/10.1016/j.iref.2023.07.099
Porter, M. E., & Linde, C. v. d. (1995). Toward a New Conception of the Environment-Competitiveness Relationship. Journal of Economic Perspectives, 9, 97-118. https://doi.org/10.1257/jep.9.4.97
Qasim, M., & Grimes, A. (2018). Sustainable Economic Policy and Well-Being: The Relationship between Adjusted Net Savings and Subjective Well-Being . https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3187101
Qingquan, J., Khattak, S. I., Ahmad, M., & Ping, L. (2020). A New Approach to Environmental Sustainability: Assessing the Impact of Monetary Policy on CO 2 Emissions in Asian Economies. Sustainable Development, 28, 1331-1346. https://doi.org/10.1002/sd.2087
Ratnawati, K. (2020). The Impact of Financial Inclusion on Economic Growth, Poverty, Income Inequality, and Financial Stability in Asia. The Journal of Asian Finance, Economics and Business, 7, 73-85. https://doi.org/10.13106/jafeb.2020.vol7.no10.073
Rehman, I. U., Shahzad, F., Hanif, M. A., Arshad, A., & Sergi, B. S. (2023). Financial Constraints and Carbon Emissions: An Empirical Investigation. Social Responsibility Journal, 20, 761-782. https://doi.org/10.1108/srj-01-2023-0014
Ren, K., Kong, Y., Zhang, T., Sun, H., Zhu, N., & Liu, F. (2022). The Impact of the Pollution Permits System on Green Innovation: Evidence from the County-Level Data in China. Journal of Cleaner Production, 344, Article ID: 130896. https://doi.org/10.1016/j.jclepro.2022.130896
Sachs, J. D., Kroll, C., Lafortune, G., Fuller, G., & Woelm, F. (2022). Sustainable Development Report 2022 . Cambridge University Press. https://books.google.com/books?hl=en&lr=&id=N5h-EAAAQBAJ&oi=fnd&pg=PR6&dq=Sustainable+Development+Report+2023&ots=_KRzmt1PUi&sig=ow2BUyN6cCKqzK_apT1Mn-OAN7c
Slepov, V. A., Burlachkov, V. K., Danko, T. P., Kosov, M. E., Volkov, I. I., Ivolgina, N. V. et al. (2017). Model for Integrating Monetary and Fiscal Policies to Stimulate Economic Growth and Sustainable Debt Dynamics. European Research Studies Journal, 20 , 457-470. https://doi.org/10.35808/ersj/847
Suki, N. M., Suki, N. M., Afshan, S., Sharif, A., & Meo, M. S. (2022). The Paradigms of Technological Innovation and Renewables as a Panacea for Sustainable Development: A Pathway of Going Green. Renewable Energy, 181, 1431-1439. https://doi.org/10.1016/j.renene.2021.09.121
Ulucak, R., Kassouri, Y., Çağrı İlkay, S., Altıntaş, H., & Garang, A. P. M. (2020). Does Convergence Contribute to Reshaping Sustainable Development Policies? Insights from Sub-Saharan Africa. Ecological Indicators, 112, Article ID: 106140. https://doi.org/10.1016/j.ecolind.2020.106140
Wang, X., Cho, S., & Scheller-Wolf, A. (2021). Green Technology Development and Adoption: Competition, Regulation, and Uncertainty—A Global Game Approach. Management Science, 67, 201-219. https://doi.org/10.1287/mnsc.2019.3538
Wu, J., Yang, C., & Chen, L. (2024). Examining the Non-Linear Effects of Monetary Policy on Carbon Emissions. Energy Economics, 131, Article ID: 107206. https://doi.org/10.1016/j.eneco.2023.107206
Yona, M. (2021). The Role of Fisheries Management in Resolving the Overexploitation Conflict of Trade Liberalization for Sustainable Fisheries . PhD Thesis, Pukyong National University. https://repository.pknu.ac.kr:8443/handle/2021.oak/1143
Yuan, B., & Zhang, Y. (2020). Flexible Environmental Policy, Technological Innovation and Sustainable Development of China’s Industry: The Moderating Effect of Environment Regulatory Enforcement. Journal of Cleaner Production, 243, Article ID: 118543. https://doi.org/10.1016/j.jclepro.2019.118543
Zaei, M. E., Kapil, P., Pelekh, O., & Nasab, A. T. (2018). Does Micro-Credit Empower Women through Self-Help Groups? Evidence from Punjab, Northern India. Societies, 8, Article No. 48. https://doi.org/10.3390/soc8030048
Zhang, M., Brookins, O. T., & Huang, X. (2022). The Crowding out Effect of Central versus Local Government Debt: Evidence from China. Pacific-Basin Finance Journal, 72, Article ID: 101707. https://doi.org/10.1016/j.pacfin.2022.101707