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Does Infrastructure Really Explain Economic Growth in Sub-Saharan Africa?

Odongo Kodongo and Kalu Ojah ()

No 653, Working Papers from Economic Research Southern Africa

Abstract: In the light of Africa’s palpable deficit in public infrastructure, we use System GMM to estimate a model of economic growth augmented by an infrastructure variable, for a panel of 45 Sub-Saharan African countries, over the period 2000-2011. We find that it is the spending on infrastructure and increments in the access to infrastructure that influence economic growth and development in Sub-Saharan Africa. Interestingly, these significant associations, especially those of infrastructure spending, are more important for lesser developed economies of the region than for the relatively more developed economies, which uncommonly have better than near-zero access to infrastructure. In addition to these robust direct links between the target variables, we find importantly that infrastructure access, and quality, also relate to economic growth indirectly via export diversification (trade competitiveness), and cross-border capital flows and export diversification, respectively. Among other important policy derivatives of our findings, we emphasize that efforts aimed at reversing Africa’s pervasive infrastructure deficit, in ways that enable economic growth and development, must be carefully nuanced.

Keywords: Infrastructure access; infrastructure stock and quality; economic growth; Sub-Saharan Africa; System GMM (search for similar items in EconPapers)
JEL-codes: H54 O11 O40 O55 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2016-12
New Economics Papers: this item is included in nep-afr and nep-gro
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Citations: View citations in EconPapers (21) Track citations by RSS feed

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