The dynamics of deforestation in sub-Saharan Africa: The impact of environmental policy and foreign direct investment on forest conversion

Amidst the pressing global concern over climate change, the urgent need to address deforestation and promote forest conservation has become a focal point on political and social agendas. This study investigates the intricate relationship between economic performance and deforestation in sub-Saharan Africa (SSA). Using a panel of SSA economies from 2000 to 2020, we examine the Environmental Kuznets Curve (EKC) hypothesis for deforestation, taking into account the effects of heterogeneity, and the influence of foreign direct investment (FDI) and environmental policy. Our findings underscore the significance of heterogeneity, as the region exhibits both negative and positive deforestation trends throughout the study period. The results provide compelling evidence supporting the inverted N-shaped EKC hypothesis for deforestation when accounting for the intervening impact of FDI and policy. The EKC turning points 803.12 and 2596.27 correspond to levels of economic performance, indicating that policy measures have a greater impact on curbing deforestation than FDI. To achieve inclusive growth and create a livable environment, it is essential to prioritise forest conservation, control population growth, manage agricultural activities, regulate trade, and protect environmental ecosystems. This will necessitate significant changes in human activities and energy consumption to promote sustainable development.