Abstract:

This study investigates the impact of climate finance on inclusive growth in sub-Saharan Africa, focusing on income inequality, poverty, and employment. Using panel data for 23 countries from 2000 to 2022 and applying second-generation panel estimators that account for cross-sectional dependence and heterogeneity, the analysis finds that climate finance has weak and statistically insignificant effects on the inclusive growth indicators. The results suggest that climate finance, in its current form, has not translated into broad-based social and economic inclusion in the region. Instead, inclusive growth dynamics are largely shaped by institutional quality, demographic pressure, and common regional trends. These findings highlight the importance of complementary institutional and social policies to enhance the inclusiveness of climate-related financial flows in sub-Saharan Africa.