Decarbonization Mechanisms and Economic Growth in Sub-Saharan Africa: Does Institutional Quality Matter?

Abstract

This paper empirically analyses whether institutional quality matters in the relationship between decarbonization mechanisms and economic growth in Sub-Saharan Africa. The study focused on three decarbonization mechanisms: renewable energy consumption, decarbonization rate, and green technology adoption. Population, industrialization, and foreign direct investment were included as control variables. The study used secondary panel data covering the period 2000 to 2024 for Sub-Saharan African countries with available economic and environmental data. The study was anchored on the neoclassical growth model, endogenous growth theory, environmental Kuznets curve perspective, Porter hypothesis, and institutional theory. A random-effects GLS regression model was adopted after diagnostic tests supported its suitability. The diagnostic results indicated that the data were stationary and free from serious autocorrelation, heteroscedasticity, and multicollinearity problems. The findings showed that renewable energy consumption, decarbonization rate, and green technology adoption each had a positive effect on economic growth in Sub-Saharan Africa. Institutional quality had a negative direct effect on economic growth but positively moderated the relationship between each decarbonization mechanism and economic growth. The interaction model explained 80.66% of the variations in economic growth. The study concludes that decarbonization mechanisms can promote economic growth in Sub-Saharan Africa, but the strength of this effect depends on the quality of institutions in each country. The study recommends that Sub-Saharan African governments strengthen institutional quality through improved governance, regulatory effectiveness, transparency, and policy enforcement so that renewable energy use, decarbonization efforts, and green technology adoption can translate into stronger and more sustainable economic growth.

Keywords: Decarbonization mechanisms, renewable energy consumption, decarbonization rate, green technology adoption, institutional quality, economic growth, Sub-Saharan Africa.

DOI: 10.7176/EJBM/18-9-04

Publication date: September 30^th 2026