Infrastructure development and poverty eradication in sub-Saharan Africa; Its effect and transmission channels

Abstract

Africa's infrastructure endowments have increased recently, including; transportation, electricity, Information and Communications Technology, and water and sanitation. Meanwhile, while poverty rates have fallen in other regions, such as Asia, they have risen in Africa. This research sought to assess: (a) the influences of infrastructure on poverty and (b) how infrastructure has moderated the impacts of income inequality, urbanisation, education, employment, and environmental quality on poverty. The findings from the generalized method of moments estimator for 40 African economies between 2003 and 2020 showed that infrastructure development reduced poverty. Various types of infrastructure development indices produced the same results. When a composite infrastructure development index was used, a positive impact on poverty was further confirmed. Additionally, developing infrastructure in SSA will strengthen the positive effects of; education, employment, and environmental quality on poverty. Additionally, the development of the infrastructure sector in the region will mitigate income inequality and urbanisation's negative effects on poverty. Based on this study's results, a discussion of policy implications has been provided.