Effect of Green Industrialization on Inclusive Growth in Sub Saharan Africa

ABSTRACT This research analyses the effect of green industrialization on inclusive growth in 27 sub‐Saharan African countries. The research covers the period from 2002 to 2021 and uses fixed effect IV regression, double least squares, and Lewbel's approach as its main methods. It concludes that green industrialization has a positive influence on inclusive growth in the 27 countries studied. A one percentage point increase in green industrialisation leads to an increase in inclusive growth of 0.00482 points at the 1% threshold. Green industrialization significantly contributes to the achievement of sustainable development goals, particularly economic growth and the reduction of inequalities. The main result of this research is in line with the theory of weak sustainability and structural transformation of the economy, which postulates green growth if appropriate mechanisms are employed. We suggest that the authorities in sub‐Saharan African countries promote the development of green industrialization by applying taxes to polluters and granting tax breaks and subsidies to green industries. They can also invest in renewable energies to encourage a transition to clean energy use. It is also necessary to raise awareness among businesses about the need to protect the environment and encourage consumers to favor products from green businesses.