Moderation of ecological footprint with FDI and agricultural sector for a better environmental performance: New insight from Nigeria

Abstract

Following the fact that above average contribution to the Nigerian economic growth come from petroleum industry and agriculture which are dominated by multinational companies, the author undertakes the task to unveil the level of emission from these sectors. The current paper adopts FDI and agricultural sector as among the vital indicators in determining the position of Nigeria in climate change. This study builds on the ecological footprint in accounting for environmental performance of Nigeria. Basic contribution of this paper is in its two-stage analyses of ARDL regression and causality with both ecological based and growth based models. This unveils both the economic and ecological footprint implication to the environment. The findings of this paper are: a positive (elasticity) relationship between economic growth (GDP) and ecological footprint is established in both the short run and long run. Negative and significant relationship is uncovered between FDI and ecological footprint. Negative association between agricultural sector and ecological footprint in both long run and sort run. The relationship that exist between these variables (energy use and population) and ecological footprint are positive which means unfavorable implication to the environmental performance. Moreover, the findings according to Granger causality are: a uni-directional causality passing from economic growth to ecological footprint, from energy use to ecological footprint, and also from population to ecological footprint. Also, a one-way transmission is established amongst economic growth and energy use, and between economic growth and population. This is in conformity with the expectations of the author, and has established a nexus among the selected variables (population and energy transmitting to economic growth, while economic growth and energy transmitting to ecological footprint). With these findings especially from FDI and agriculture, the authorities of the country are expected to build a sustainable policy framework in promoting, regulating and sustaining the trend with mindset of maintaining a healthy environment.