Environmental Quality and Economic Growth in Nigeria

This study looks at the connection between Nigeria's economic growth and environmental quality between 1981 and 2021. In order to do this, the study outlines two (2) distinct goals, which are to: (1) assess the influence of environmental quality on Nigeria's economic growth; and (2) ascertain whether there is a causal relationship between environmental quality and Nigeria's economic growth. The following variables' time series data from the World Development Indicator (2024 ): Manufacturing value added, government capital expenditure, labor force size, pollution levels (a proxy for environmental quality), and real GDP growth rate (a proxy for economic growth) were all taken into consideration. The time series' unit root was examined using the Augmented Dickey–Fuller test, and the results of the Bounds Testing for cointegration revealed that This demonstrated the long-term link between the factors. A Granger causality test was used to see if there is any causal relationship between environmental quality and economic growth, and the ARDL estimation approach was used to assess the effect of environmental quality on economic growth in Nigeria. The regression was performed using E-views 9.0. The results of this study show that Nigeria's economic growth is adversely and considerably impacted by environmental quality. The results of this study also demonstrated a long-term correlation between economic growth and environmental quality. Finally, this study proves that environmental quality and economic growth in Nigeria are not causally related. Therefore, this report recommends that the government enact laws and provide incentives to Motivate industries to implement sustainable technologies and production practices. In order to diversify the energy mix and move away from carbon-intensive sources, encourage investment in renewable energy sources. Finally, to hold industries responsible and lessen the effects of greenhouse gases, establish and track clear emission reduction goals.