The shift to circular economy (CE) frameworks and green innovation (GI) has become crucial to global sustainability initiatives. However, concrete evidence of their joint impact on economic performance in Africa remains scarce. Driven by this disparity, this research examines the separate and combined effects of CE adoption features and GI on sustainable economic growth within the East African Community (EAC) from 2000 to 2024 through panel regression (FE/RE), dynamic system-GMM, and interaction models. Empirical findings indicate that resource productivity, R&D investment, and the CE×GI interaction notably increase GDP per capita, with long-run effects considerably greater than those observed in the short run. The adoption of renewable energy also positively impacts growth, whereas CO 2 emissions have a negative influence, underscoring environmental trade-offs. Short-run dynamics indicate that CE and GI produce quick yet modest growth, while the correction error term verifies swift adjustment toward the long-run equilibrium. Cross-national evaluations reveal varied levels of preparedness. The interaction term (CE × GI) is positive and statistically significant across different model specifications, validating the complementarity between circular practices and innovative capacity. Variables such as human capital, trade openness, foreign direct investment, and governance quality positively influence sustainable growth, while inflation and CO 2 emissions negatively affect it. The results highlight that the collaboration between CE and GI, backed by renewable energy and institutional capability, is essential for sustainable development, consistent with ecological modernization theory and the Porter hypothesis. The research recommends improving regional CE policies, investing in innovation ecosystems, strengthening human capital and governance standards, and developing integrated CE–GI strategies tailored to each country's unique circumstances to promote inclusive, resilient, and low-carbon development in East Africa. • The Study provides an integrated assessment of circular economy adoption and green innovation on sustainable economic growth across the eight East African community countries. • A robust panel econometric framework, combining cointegration analysis, FMOLS, DOLS, and error-correction modelling, reveals strong long-run complementarity between CE adoption and green innovations. • Both CE and GI independently and jointly exert significant positive effects on sustainable economic growth, while macroeconomic and governance factors condition their effectiveness. • The CE-GI interaction term demonstrates that circular practices are substantially more growth-enhancing when supported by strong innovation ecosystems. • Policy recommendations emphasize coordinated CE-GI strategies, improved institutional quality, investments in human capital, and renewable-energy-driven innovation to accelerate green transitions in the EAC region.
Gebretsadik et al. (Fri,) studied this question.