Industrialisation and Sustainable Development in Africa: Empirical Evidence from Panel Data (2000–2023)

Abstract

This study examined the effect of industrialisation on sustainable development in Africa over the period 2000–2023. Using panel data from 42 African countries, the study employs the Driscoll–Kraay (DK) estimation technique to account for crosssectional dependence, heteroskedasticity, and serial correlation. The Fully Modified Ordinary Least Squares (FMOLS) method is applied as a robustness check. At the same time, the System Generalised Method of Moments (GMM) is used to validate the dynamic persistence of sustainable development outcomes. Sustainable development is assessed using a multidimensional index that captures economic sustainability, social sustainability (life expectancy, expected years of schooling, mean years of schooling), and environmental sustainability (carbon emissions and material footprint). The results consistently reveal that industrialisation exerts a positive and statistically significant effect on sustainable development in Africa (coefficient ≈ 0.017, p < 0.05), confirming that industrial expansion strengthens the economic, social, and environmental dimensions of sustainable development. Industrialisation reduces carbon dioxide emissions and material footprint in the long run, while significantly improving life expectancy and educational outcomes. Population growth and remittances show mixed effects, while foreign direct investment and inflation generally undermine sustainable development outcomes. These findings underscore industrialisation as a structurally transformative pathway to sustainable development in Africa, particularly when aligned with clean energy transitions and robust institutional frameworks.