Climate Change, Financial Development, and Health Outcomes in Sub-Saharan Africa

This study examines the relationship between climate change and health outcomes in Africa. It further explores the role of financial development in moderating the relationship between climate change and health outcomes. It applies the dynamic system of the generalized method of moments estimation to a panel dataset of 43 African countries over the period 2000–2023. The key findings confirm that higher CO₂ emissions significantly reduce life expectancy and increase mortality rates, whereas financial development has a positive effect on life expectancy but negatively affects mortality rates, indicating that an increase in financial development mitigates the negative impact of carbon emissions on health outcomes. This paper provides empirical evidence of the fundamental role of financial development in the nexus between climate change and health outcomes. While governments are encouraged to increase investments in climate-resilient healthcare infrastructure, clean water systems, sustainable energy, and disease monitoring, financial sector players are advised to prioritize the creation of innovative financial tools related to climate and health, such as climate risk insurance, weather-indexed insurance, and health insurance, which can help reduce the impact of health problems caused by climate change on people, governments and the economy as a whole. JEL Code: Q54; G10; I15