Economic Complexity Could Help Sub-Saharan Africa Grow More Sustainably

Sub-Saharan Africa's environmental future may depend less on how fast its economies grow than on what they become capable of producing. Moving beyond raw commodities toward more knowledge-intensive and technologically sophisticated production could reduce ecological pressure, but the gains are neither automatic nor uniform.

A study titled "Sub-Saharan African Cross-Country Analysis of Economic Complexity and Ecological Footprint: The Quantile Regression Approach," published in Economies, tests that proposition across 27 countries. Authors Chuma Maxwele and Syden Mishi find that economic complexity improves environmental outcomes most clearly where ecological footprints remain relatively low, while the relationship loses strength as environmental pressure increases.

Complexity Offers a Way Out of the Extractive Trap

Many sub-Saharan African economies remain heavily dependent on agriculture, mining, oil, logging and other primary commodities. These sectors generate export earnings and public revenue, but they often create limited domestic value, expose countries to volatile prices and place heavy pressure on land, forests, water and ecosystems.

Economic complexity offers a different development lens. Rather than measuring only how much an economy produces, it considers the depth of productive knowledge behind that output. Economies become more complex when they acquire the ability to manufacture specialised goods, combine technologies, build skilled workforces and support firms with stronger institutions and infrastructure.

The researchers test whether this sophistication changes the environmental consequences of growth. Their dataset combines ecological-footprint information with the Harvard Growth Lab's Economic Complexity Index and indicators for economic growth, fossil-fuel electricity, renewable generation and urbanisation.

The ecological footprint is broader than carbon emissions. It captures human demand on biologically productive land and resources, including cropland, grazing land, forests, fishing grounds, built-up areas and the capacity needed to absorb carbon. This makes it particularly relevant for African economies, where environmental stress often appears through deforestation, land conversion, resource extraction and habitat degradation rather than industrial emissions alone.

The study's main pooled quantile analysis finds that economic complexity significantly lowers ecological footprints at the 5th, 25th and median quantiles. The estimated effects are strongest at the lower end of the environmental-pressure distribution.

The implication is that even modest technological and productive upgrading may help less complex economies use resources more efficiently. Moving from raw commodity dependence toward processing, manufacturing and knowledge-intensive activities can introduce better machinery, improved management, higher productivity and cleaner production methods.

This finding challenges the "grow first, clean up later" model, under which environmental damage is treated as the unavoidable price of early development. It suggests that countries may be able to build environmental considerations into structural transformation from the beginning, provided that new capabilities are directed toward more efficient sectors.

The Green Dividend Fades as Environmental Pressure Builds

The relationship becomes less reassuring among economies or observations with larger ecological footprints. Economic complexity retains a negative coefficient at the 75th quantile, but the effect is not statistically significant. At the 90th quantile, the coefficient becomes positive, although it also remains insignificant.

This pattern points to economic complexity's double-edged nature. At early stages, new capabilities can reduce waste and improve efficiency. But as industrial activity expands, higher production may also increase energy use, infrastructure construction, material consumption and pressure on natural resources.

Countries such as South Africa, Kenya and Botswana have more developed productive structures than many regional peers. Their experience illustrates a broader risk: industrial advancement can initially intensify environmental pressure before cleaner technologies, regulations and production systems become dominant.

The study does not show that complexity is automatically green. It shows that the environmental outcome depends on the structure and direction of diversification.

There is also reason for statistical caution. A two-stage least-squares model supports the main result, finding that economic complexity reduces the ecological footprint, although only at the 10% significance level. However, two additional robustness models, fixed-effects quantile regression and method-of-moments quantile regression, find no statistically significant complexity effect.

The inconsistency means the central relationship is sensitive to the estimation method and should not be interpreted as definitive proof of causality. Economic complexity may support environmental improvement, but the available evidence does not establish that productive sophistication alone will deliver it.

The study also uses a national economic-complexity index, which cannot distinguish between sectors. An economy can become more sophisticated by producing medical equipment, machinery and digital services, or by expanding petrochemicals, mineral processing and heavy industry. Those pathways may raise the same index while creating very different ecological outcomes.

Future research will need sector-level measures to determine which forms of complexity are environmentally beneficial and which merely make resource-intensive production more advanced.

Fossil Power Still Overwhelms the Gains

The study's most consistent environmental warning concerns fossil-fuel electricity. Fossil generation increases ecological footprints at every quantile, with the impact becoming strongest toward the upper end of the distribution.

This finding exposes a fundamental contradiction in Africa's industrial ambitions. More sophisticated production requires reliable electricity, but if that power comes predominantly from coal, oil or gas, industrial upgrading may reproduce the environmental damage it is supposed to reduce.

Economic growth also increases ecological pressure in parts of the distribution, particularly around the median and upper quantiles. The result reflects the composition of growth across much of the region. Expansion is still frequently driven by mining, oil extraction, commercial agriculture, logging and construction, activities that can increase output while depleting natural capital.

More unexpectedly, the study reports that renewable electricity generation is positively associated with ecological footprints across all quantiles. This should not be read as evidence that renewable energy is more damaging than fossil power.

Renewable projects require land, transmission networks, minerals, roads and other infrastructure. Large solar installations, hydropower reservoirs and wind farms can therefore increase certain components of the ecological footprint even as they reduce carbon emissions. Renewable generation may also be expanding alongside fossil fuels rather than replacing them.

The distinction is critical for policy. Adding renewable capacity to an unchanged fossil-heavy system may increase total land and infrastructure demand without producing a proportional environmental gain. The more meaningful measure is whether cleaner energy displaces fossil generation and whether projects are designed to minimise ecological and social disruption.

The study also finds that a higher urban-population share is generally associated with a smaller ecological footprint. The authors suggest that compact settlement, greater use of infrastructure and a shift toward manufacturing and services may reduce dependence on land-intensive primary activities.

However, urbanisation is not inherently sustainable. Poorly planned cities can intensify congestion, informal settlement, pollution and land conversion. The finding is better understood as a case for well-designed urban development, dense cities, public transport, efficient buildings and coordinated land use, rather than a simple argument for faster urban growth.

Africa Must Choose What Kind of Complexity It Builds

African countries need more economic complexity, but they also need to shape its direction. Industrial policy should prioritise sectors that combine higher productivity with lower material and energy intensity. Agro-processing, repair and recycling industries, sustainable construction materials, renewable-energy components, digital services, pharmaceuticals and selected forms of advanced manufacturing may offer opportunities to create jobs and build capabilities without replicating the most damaging features of extractive development.

Foreign direct investment can support that transition through technology transfer, skills development and participation in regional and global value chains. But investment incentives should not be granted without environmental conditions. The same multinational activity that brings knowledge can also relocate pollution to countries with weaker regulation.

Governments should therefore link tax benefits, industrial zones and public financing to local supplier development, cleaner technologies, environmental reporting and enforceable resource-efficiency standards. Investor-friendly policy must not become a race to the bottom.

Development banks and international partners can help finance electricity grids, public transport, green industrial infrastructure and technical training. These investments connect directly with SDG 8 on decent work and economic growth, SDG 9 on industry and innovation, SDG 12 on sustainable consumption and production, and SDG 13 on climate action.

Better measurement is equally important. GDP growth, export volumes and complexity rankings cannot reveal whether countries are exhausting the ecological foundations of future prosperity. Governments need to track carbon intensity, land use, biodiversity, water demand, pollution and resource efficiency alongside conventional economic indicators.

Overall, the study's important message is that development pathways are not environmentally neutral. The capabilities accumulated today will determine whether tomorrow's economies are built around cleaner production and resilience, or around more efficient forms of extraction.