Adjusted Net Savings and Sustainable Development in Africa: A Panel Evidence Approach

ABSTRACT: This study investigates the key drivers of sustainable development in African economies using Adjusted Net Savings (ANS) as an indicator of long-term sustainability. Employing second-generation panel data methods—namely the Augmented Mean Group (AMG) estimator, System GMM, and the Dumitrescu–Hurlin panel causality test—the analysis accounts for cross-sectional dependence, heterogeneity, and potential endogeneity across countries. The results indicate that economic growth significantly enhances sustainable development in the long run: a one-unit increase in GDP per capita is associated with approximately a 31-point increase in ANS. In contrast, renewable energy consumption exerts a negative short-run effect on sustainability (−0.38), reflecting transition-related costs and efficiency constraints in developing economies. Carbon intensity adversely affects sustainability, while the impact of trade openness remains heterogeneous across countries. Country-specific estimates further reveal substantial cross-country differences driven by variations in economic structure, energy systems, and institutional capacity. Overall, the findings suggest that achieving sustainable development in Africa requires aligning economic growth with environmental efficiency through well-sequenced renewable energy investments, green trade policies, and strengthened institutional frameworks.