Digital Economy and Green Growth in Nigeria: The Role of Internet Penetration, Natural Resources and Renewable Energy

By: Nkama N. Otta, Jeniffer Ogbonna, Chigozirim F. Awoke, Kehinde A. Olajuwon & Mgbodichimma K. Okoro

Pages: 138–154, Volume: 3, Number: 2

Published by: AEFUNAI Journal of Economics, Finance and Development Studies, Alex Ekwueme Federal University, Ndufu-Alike, 8/1/2026, 2026

ISSN (Electronic): 2536-6742

DOI:

Digital Economy and Green Growth in Nigeria: The Role of Internet Penetration, Natural Resources and Renewable Energy

Abstract:

Growing environmental degradation presents a significant challenge to achieving sustainable economic development in Nigeria, where the pursuit of economic growth often conflicts with environmental preservation. Although green growth (GGR) has gained increasing policy attention as a pathway to sustainable development, empirical evidence on the combined effects of digital transformation, natural resource utilization, renewable energy consumption, and trade openness remains limited. This study investigates the influence of internet penetration (ITU), natural resources (NR), renewable energy (RE), and trade openness (TRD) on green growth in Nigeria over the period 1996–2024. The study adopts the Autoregressive Distributed Lag (ARDL) model to estimate both short- and long-run relationships, while Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Canonical Cointegrating Regression (CCR) are employed to test the robustness of the findings. The empirical results reveal that internet penetration significantly enhances green growth, with a 1% increase improving GGR by 0.08% in the short run and 0.14% in the long run, reflecting gains from digital innovation and efficiency. Renewable energy consumption also exerts a strong positive effect, increasing GGR by 2.2% in the short run and 3.9% in the long run. Conversely, natural resource dependence reduces green growth by 0.11% in the short run and has a weakly significant negative long-run effect, while trade openness exerts no statistically significant influence. The findings consistently support the robustness of the estimated relationships. The study recommends expanding digital infrastructure, accelerating renewable energy adoption, strengthening sustainable resource governance, and aligning trade policies with environmental sustainability objectives to foster inclusive green growth in Nigeria.

Keywords: Green growth, Digital economy, Internet penetration, Renewable energy, Natural resources, Nigeria