Unpacking the finance-energy-environment nexus: can Africa sustain agricultural productivity amid energy poverty and environmental degradation?

Abstract

Achieving resilient and sustainable agricultural productivity is essential for food security, economic transformation and rural livelihoods across Africa. This study estimated the role of energy poverty, financial development and environmental degradation in shaping agricultural productivity across 34 sub-Saharan African countries between 2005 and 2020. In spite of the growing interest on individual drivers, no research has jointly assessed these interconnected factors, nor estimated whether financial development can moderate the effects of environmental and energy poverty on agricultural development. Employing the Method of Moments Quantile Regression (MMQR), which accommodates distributional dynamics, nonlinearity and heterogeneity, the study identified that environmental degradation and energy poverty reduce agricultural productivity. In contrast, financial development directly boost productivity and mitigates the adverse effects of both environmental deterioration and energy deprivation. These outcomes reinforce the centrality of inclusive financial systems in promoting sustainable and resilient agriculture in Africa. This research offers actionable guidance for decisionmakers, underscoring the importance of tailored financial measures, environmental stewardship and renewable energy access to stimulate agricultural development and advance several Sustainable Development Goals.