Exploring the Impact of Infrastructure on Economic Growth in Africa

Abstract

The study explored the impact of infrastructure on economic growth in Africa. It adopted a qualitative and quantitative approach to achieve its objectives which includes: (1) A review of case studies on infrastructure to identify lessons that can help stakeholders in the continent improve on infrastructure,(2) An analysis of individual trends of selected infrastructure indicators in Africa and (3) Assessment of the aggregate impact of the selected infrastructure indicators(i.e. Road, Electricity, Telecommunication, Water and Sanitation) on GDP for the period 2000 to 2010 given the control variables (FDI, Political Stability, Population and Trade).The qualitative findings suggest that there is the need for much more investment to be injected into the provision of infrastructure in the African continent characterized by important factors like Political Stability, liberalizing the economy to allow for more private sector participation, establishment of appropriate regulatory frameworks, local capacity building, community participation, more research and development(R&D) amongst others. The trend analysis revealed the stable and unstable performance of the infrastructure indicators and factors influencing those trends like Political instability, private sector participation, low investment, poor maintenance culture etc which can serve as useful information for stakeholders in the continent. Finally the predicting model (i.e. Multiple stepwise regression) used in the study found Road, Electricity and FDI infrastructure to be statistically significant in impacting on GDP whiles Telecom, Water and Sanitation infrastructure as well as the other control variables namely Population, Trade, Political stability were not. On the whole, the study has shown that infrastructure is significant in contributing to economic growth in the African continent hence the need for much more attention and priority to be given to it by stakeholders to help improve on it in the continent.