Natural resource rent and environmental quality nexus in Sub-Saharan Africa: Assessing the role of regulatory quality

Despite the overwhelming evidence on the nexus between natural resource rent and environmental quality, the role of regulatory quality in the relationship remains unexplored, especially in Sub-Saharan Africa. This paper, therefore, assesses the moderating role of regulatory quality on the relationship between natural resource rent on environmental quality in 20 resource-dependent and 21 non-resource-dependent economies in Sub-Saharan Africa between 1996 and 2018. The cross-sectional augmented autoregressive distributed lag (CS-ARDL) and pooled mean group (PMG) estimators were employed in this regard. The result signaled that natural resource rent adversely affects environmental quality, especially in resource-dependent countries. It also revealed that regulatory quality plays a significant moderating role in reducing the adverse effect of natural resource rent on the environment. Thus, it is imperative to devise pragmatic approaches toward strengthening the regulatory quality and implementing environmentally friendly policies that will guarantee both improved natural resource rent and environmental sustainability.