Climate Finance and Natural Resource Depletion in Africa: Does Institutional Quality Matter?

Pascal Ndyanabo Rutazihana,Arsene Mouongue Kelly

Published 2025 in Society & Natural Resources

ABSTRACT

Abstract This study examines the relationship between climate finance and natural resource depletion in Africa, where unsustainable exploitation of natural resources continues to threaten ecological balance and long-term development prospects. Against this backdrop, the research has three key objectives: (1) to quantify the effect of climate finance on resource depletion, (2) to assess the moderating role of institutional quality in this relationship, and (3) to propose policy pathways for sustainable resource management. Methodologically, the study employs both Driscoll-Kraay standard errors and the system GMM estimators to analyze data from 49 African countries during the period 2012–2021. The findings reveal that climate finance significantly reduces natural resource depletion in Africa, with institutional quality, serving as a moderator that amplifies this effect. A series of robustness checks confirm the results’ validity and based on the findings, the study recommend increases in climate finance allocations coupled with institutional reforms that strengthen transparency and accountability.

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REFERENCES

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