Public infrastructural development and economic performance in Africa: a new evidence from panel data analysis

Abstract

This study examined the effects of both aggregate and disaggregated infrastructural development indices (such as transport, electricity, ICT, and water and sanitation infrastructure indices) on economic performance in Africa. The study used the dynamic system GMM framework and found that both aggregate and disaggregated infrastructural development indices impact positively on GDP per capita growth in Africa. These impacts were shown to be significant in all cases, except for the transportation infrastructure index. The results overwhelmingly confirmed the prevalence of the symmetric hypothesis in the infrastructure–growth relationship in Africa. The study also found some evidence in support of the significant roles of capital, labour and initial GDP per capita in Africa’s economic performance, while the role of trade remained negative and muted. The study concluded that through effective public administration, African leaders and policymakers can promote economic performance on the continent by evolving policies that favour increased infrastructural development, human capital development and capital accumulation.