Advancing Sustainability: Exploring the Impact of Debt, FDI, Finance and Environment in Nigeria

Abstract

Nations and international organizations advocate stringent
measures to protect biodiversity and promote environmental
sustainability. Without these measures, sustainable
development becomes unattainable due to unchecked
greenhouse gases. This study examined the impact of external
debt, foreign direct investment (FDI), financial development,
and renewable energy usage on environmental sustainability in
Nigeria from 1990 to 2022, using a novel Dynamic
Autoregressive Distributed Lag (ARDL)-Simulations
Framework. Results showed that external debt, renewable
energy usage, and FDI improve environmental sustainability in
both the short and long term, while financial development
reduces environmental quality. The study recommended that
Nigeria manage external debt prudently, ensuring that funds
are channeled toward renewable energy investments. This
strategy will prevent debt from burdening the economy and
harming environmental sustainability.