Economic Growth and Forest Cover Dynamics in Ethiopia: A Time Series Analysis (1992-2021)

This study investigates the relationship between economic growth and forest cover dynamics in Ethiopia using annual time-series data from 1992 to 2021 obtained from the World Development Indicators database. Pre- and post-estimation tests were conducted, and a multiple regression model was employed for data analysis. The findings reveal a statistically significant inverse relationship between economic expansion and forest cover. A 1% increase in growth of GDP per capita is associated with a 577 km² decline in forest cover (p = 0.002). Inflation is also negatively associated with forest cover, while extreme heat events, measured by a variable heat index (>35°), also exert the most substantial adverse effect on forest cover. Unit root tests confirm that all variables are stationary at the level, supporting the robustness of the results. These findings imply that Ethiopia's agriculture-driven economic growth accelerates the conversion of forests to farmland, contributing to soil erosion, waterbody siltation, and declining agricultural productivity. Strengthening Ethiopia's Climate-Resilient Green Economy Strategy, expanding reforestation programs, incentivizing agroforestry, and diversifying the economy beyond resource-dependent sectors are recommended.