Circular economy-related resource efficiency, Green innovation capacity, and sustainable economic growth in the East African Community: Evidence from panel econometric analysis (2000-2024)

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 -study 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 CO2 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 CO2 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 study 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.