The Symmetric and Asymmetric Effects of ICT on Green Growth in African Countries: Does Renewable Energy Consumption Matter?

Abstract

This paper investigates the relationship between the diffusion of information and communication technology (ICT) and green growth in African countries. Encouraging financial innovation can promote the adoption of renewable energy, thereby boosting green growth in these countries. Utilizing a nonlinear autoregressive distributed lag (NARDL) panel modelling approach, we analyse the impacts of these variables on green economic growth. The results reveal that renewable energy consumption has a negative effect on green economic growth. Similarly, financial development exhibits a negative correlation with green economic growth, potentially due to factors such as financial sector weaknesses, macroeconomic volatility, financial crises, and nonlinear dynamics. Conversely, ICT diffusion positively and significantly influences GDP. Both renewable energy and ICT diffusion emerge as crucial factors for enhancing economic activity, job creation, and environmental improvement. These findings highlight the need for targeted financial policies to strengthen the financial sector’s role in supporting green initiatives. Policymakers should prioritize regulatory frameworks that enhance financial stability and promote sustainable investments. Additionally, future research could explore more granular data and alternative methodologies to further examine the dynamic interactions between ICT, financial development, and environmental sustainability.