Building Critical Infrastructures: Evaluating the Roles of Governance and Institutions in Infrastructural Developments in Sub-Sahara African Countries.

Abstract

The Sub-Saharan African (SSA) region has notably been in the limelight of infrastructural deficit discussions over the decades. Although the region's infrastructural development is gradually improving, the levels and pace of development remain generally poor compared to the rest of the world. This study thus aims to empirically examine the roles of governance and institutions in infrastructural developments in the Sub-Sahara African (SSA) region toward addressing the pressing needs for critical infrastructures for the region. The empirical strategies utilized in the study include the Common Correlated Efficient Mean Group (CCEMG) and Dynamic CCEMG methods among others. These empirical approaches were applied to analyze data on governance and institutional quality proxies for the SSA region to achieve the study's objectives while controlling for the effects of industrial value-added, foreign capital inflow (FDI), and overall economic growth for the understudied period (1990-2019). The results reflect the essence of governance and institutional quality as these variables significantly boost infrastructural development in SSA. In addition, industrialization and growth also show a favorable impact on the development of infrastructure thus reflecting that the transition from agrarian to industrial economies occurs in parallel with infrastructure development in the SSA. However, FDI inflows were not found to be significantly instrumental to infrastructural development in the region. Hence, the SSA must strive to strengthen institutions and harmonize their industrial and economic push with infrastructural developments while encouraging potential foreign investors to diversify investments to infrastructural projects beyond the usual primary sector/resource-based activities.