Journal of Economics and Development, Vol. 22 No. 1, pp. 91-109 | DOI: 10.1108/JED-11-2019-0062
Infrastructure development and industrial sector productivity in Sub-Saharan Africa
The purpose of this study is to examine whether the state of infrastructure development in Sub-Saharan Africa actually stimulates industrial sector productivity, using a panel data set of 17 countries spanning from 2003 to 2018.
The study used panel least square estimation technique to examine the relationship between the variables.
The result of the study indicates that the major factor that influences industrial sector productivity in Sub-Saharan Africa is their quantity and quality of telecommunication infrastructure. Analysis shows that the relatively low level of industrial sector productivity in Sub-Saharan Africa is largely due to their poor electricity and transport infrastructure and underutilization of water supply and sanitation infrastructure.
The government should partner with other developed countries of the world such as Germany, Japan, Sweden, Netherlands, Austria, Singapore, United States of America, United Kingdom, Switzerland and United Arab Emirates, which are the top ten countries in infrastructure ranking as currently released by the World Bank, to equally extend their quality infrastructure to their own country for enhanced industrialization.
The novelty of this research lies on the fact it is a cross-country study as against the few empirical studies that focused only on a single country. Also, the study made use of the four main indicators of infrastructure development in an economy, which are electricity infrastructure, transport infrastructure, telecommunication infrastructure and water supply and sanitation infrastructure, to examine its effect on industrial sector productivity in Sub-Saharan Africa.
Keywords:Infrastructure development, Industrial sector productivity, Sub-Saharan Africa, Panel least square estimation