Telecoupled landscapes: Spatial effects of external financial inflows on Africa’s biodiversity

According to most globalisation and econometric studies, the high inflow of external financial inflows (EFI: foreign direct investments [FDI], International Bank for Reconstruction and Development [IBRD] loans, remittances [RM], International Monetary Fund [IMF] loans, and technical assistance [TA]) has a positive impact on Africa’s socioeconomic progress. However, on EFI’s impact on the environment, these studies have produced opposing viewpoints: a pollution haven (negative), Porter (positive), and halo (neutral) effect. Possible reasons are that they focus on one or a few EFI variables while proxying the environment as pollution or carbon emissions. To settle the contradictory viewpoints, this study employs a telecoupling based approa and a multiscale spatial weighted regression technique to assess the EFI and environment nexus in Africa. Data on forest cover, farmland, and species distribution were acquired from the World Bank and IUCN databases for 55 African countries. Results showed that all three contrasting viewpoints of EFI’s impact on the environment were prevalent but differed by type of EFI and spatial scale. TA and Grants enhance the protection of threatened species and forest cover; FDI and RM have neither a positive nor a negative impact. On the contrary, IBRD generated negative impacts across all nations, with higher impacts in Eastern African countries and less in Northern and Southern Africa. The study recommends that EFI providers, international environmental agencies and African countries should work together to develop nature-based loans/insurance/finance with strong biodiversity conservation tenets.