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The nexus between infrastructure (quantity and quality) and economic growth in Sub Saharan Africa

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  • Chengete Chakamera
  • Paul Alagidede

Abstract

This paper examines the growth effects of infrastructure stock and quality in Sub Saharan Africa (SSA). While previous studies established that the poor state of infrastructure in SSA slows economic growth, there is little evidence on infrastructure quality and a robust analysis on the causal links between infrastructure and economic growth. Using principal components analysis to cluster different infrastructure measures and examining the infrastructure-growth nexus in a Generalised Method of Moments while accounting for heterogeneity in a panel setting, our results reveal strong evidence of a positive effect of infrastructure development on economic growth with most contribution coming from infrastructure stock. The quality-growth effect is weak, thus giving credence to the combined effects of infrastructure stock and quality on growth, especially in regions with moderately high quality, and smaller in those with poorer quality. However, the long-term quality effect is higher than the short-term. Among the disaggregated infrastructure components, electricity supply exerted the greatest downward pressure on growth in SSA. Lastly, we find evidence for a unidirectional causality from aggregate infrastructure to growth. A number of policy implications are discussed.

Suggested Citation

  • Chengete Chakamera & Paul Alagidede, 2018. "The nexus between infrastructure (quantity and quality) and economic growth in Sub Saharan Africa," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(5), pages 641-672, September.
  • Handle: RePEc:taf:irapec:v:32:y:2018:i:5:p:641-672
    DOI: 10.1080/02692171.2017.1355356
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    Cited by:

    1. Yanfei Bai & Dongxue Zhai & Xuefeng Zhao & Delin Wu, 2023. "The Impact of Property Rights Structure on High-Quality Development of Enterprises Based on Integrated Machine Learning—A Case Study of State-Owned Enterprises in China," Sustainability, MDPI, vol. 15(4), pages 1-23, February.
    2. Isaac K. Ofori & Camara K. Obeng & Simplice A. Asongu, 2024. "What Really Drives Economic Growth in Sub-Saharan Africa? Evidence from the Lasso Regularization and Inferential Techniques," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 144-179, March.
    3. Júlio Vicente Cateia & Maurício Vaz Lobo Bittencourt & Terciane Sabadini Carvalho & Luc Savard, 2023. "Funding schemes for infrastructure investment and poverty alleviation in Africa: Evidence from Guinea‐Bissau," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1505-1529, August.
    4. Akram, Rabia & Chen, Fuzhong & Khalid, Fahad & Huang, Guanhua & Irfan, Muhammad, 2021. "Heterogeneous effects of energy efficiency and renewable energy on economic growth of BRICS countries: A fixed effect panel quantile regression analysis," Energy, Elsevier, vol. 215(PB).
    5. Brice Kamguia & Manuella Ndjakwa & Sosson Tadadjeu, 2023. "Does infrastructural development foster export upgrading in Africa?," African Development Review, African Development Bank, vol. 35(1), pages 79-94, March.
    6. David Suárez-Cuesta & Maria C. Latorre, 2023. "Modeling the Impact of Public Infrastructure investments in the U.S.: A CGE Analysis," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 29(3), pages 165-176, August.
    7. Chengete Chakamera & Noleen M. Pisa, 2021. "Associations Between Logistics and Economic Growth in Africa," South African Journal of Economics, Economic Society of South Africa, vol. 89(3), pages 417-438, September.
    8. Timilsina,Govinda R. & Stern,David S. & Das,Debasish Kumar, 2021. "How Much Does Physical Infrastructure Contribute to Economic Growth ? An Empirical Analysis," Policy Research Working Paper Series 9888, The World Bank.
    9. Timilsina,Govinda R. & Hochman,Gal & Song,Ze, 2020. "Infrastructure, Economic Growth, and Poverty : A Review," Policy Research Working Paper Series 9258, The World Bank.
    10. Sedef Sen & Tugba Yilmaz, 2023. "An Econometric Analysis on the Relationship between Infrastructure and Economic Growth," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 10(2), pages 361-393, July.
    11. Faheem Ur Rehman & Yibing Ding & Abul Ala Noman & Muhammad Asif Khan, 2020. "The Nexus Between Infrastructure and Export: An Empirical Evidence from Pakistan," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 12(2), pages 141-157, May.
    12. Remy Tehero & Emmanuel Brou Aka & Murat Cokgezen, 2020. "Drivers of the Quality of Electricity Supply," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 183-195.
    13. Sosson Tadadjeu & Paul Ningaye & Henri Njangang, 2023. "Are natural resources also bad for infrastructure quality?," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1053-1079, August.

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