Interconnected dynamics of CO2, inflation, imports, agriculture, economic growth, foreign direct investments, and population growth in the East African Community

The EAC member countries are now on the move towards industrialization and other strategies to boost economic development and growth. This has shown a boom in FDI and many development projects that may influence the economy. With their contribution, there are positive and negative externalities that it is better to differentiate. Therefore, this study aims to explore the interconnected dynamics of CO2, inflation, imports, agriculture, GDP, FDI, and population growth in the EAC. The research is descriptive, employing secondary data from the World Bank database. We employed several unit root tests such as Levin, Lin & Chu t*, Im, Pesaran, and Shin W-stat, as well as the ADF-Fisher Chi-square and PP-Fisher Chi-square tests. The results of the "unit root test" demonstrate that all the variables are stationary in their first difference; therefore, the use of the panel vector autoregressive approach. The results show that only unidirectional reactions were proven among the variables. However, jointly, all the variables were impactful but had no short-run impact among themselves. In this case, policymakers do not need to consider them in the short run. Instead, they have to consider them in the long run due to the fact that, in the long run, all the variables are impactful among themselves. Therefore, for policymakers, enterprises, and the community at large, the interconnected dynamics of the variables within the East African Community (EAC) have substantial practical ramifications. It is essential to be aware of and comprehend these implications for sustainable development and informed decision-making.