China’s Infrastructure Financing and the Role of Infrastructure in Awakening African Economies

Abstract

African economies, through Agenda 2063, recognize that developing infrastructure – transport, electricity, energy, water, and e-connectivity – will be critical for the region to assume a lasting place in the global economic system. As a result, this paper addresses the continent’s infrastructure gap and provides an important insight into the rapidly growing presence of China’s official infrastructure financing in Africa as well as the distinctive character of its involvement. In addition, the paper provides an empirical evaluation of the role of infrastructure in awakening African economies. The generalized-method-of-moments (GMM) estimator for dynamic models of panel data developed by Arellano and Bond (1991), and Arellano and Bover (1995) was employed to estimate an infrastructure-increased growth model.