Urbanisation, Climate Change and Economic Growth: Evidence from Sub-Sahara Africa Urbanisation, Climate Change and Economic Growth: Evidence from Sub-Sahara Africa

Abstract

The study contributes to literature by investigating the effect of climate change and urbanisation on economic growth in Sub-Sahara Africa using data on two climate variables, as well as new measure of urbanisation proposed by Gross and Ouyang (2022). Employing annual panel data from 32 Sub-Sahara African countries over 21-year period and adopting dynamic estimation techniques, the study established that urbanisation, temperature and precipitation are statistically significant determinants of economic growth in the region. Again, the study revealed that urbanisation and climate change variables have non-linear relationships with economic growth in SSA. However, all the climate change variables are effective in playing the moderating role of urbanisation to affect economic growth. The study recommend that the region’s governments not only have a responsibility to work constructively for a global agreement to manage climate change, but should also provide an enabling policy framework covering management, planning and service delivery functions for adaptation that facilitate and support local institutions and other actor’s efforts. Removing barriers to rural-to-urban migration could allow for economic growth, but the economic benefits will be far greater with supportive policies, market creation and infrastructure investments. Additionally, Governments should seek out ways of enabling forms of urbanisation that contribute to growth, poverty reduction and environmental sustainability, rather than encouraging (or discouraging) urbanisation per se.