Infrastructure development as key to economic growth and regional economic cooperation. The paper also utilized threestage least squares technique to capture the transmission. There is abundant theoretical work on the contribution of infrastructure to output. Underminding it infrastructure is underminding the growth and development of nigerian. Ajide1 this paper investigates the role of frazer economic freedom index on fdi growth relationship over the period spanning 1980 through 2010 using annual time series data. From the result, it is clear that infrastructure is an integral part of nigeria economic growth. A theoretical analysis of the impact of infrastructure on economic growth and the competitiveness of domestic producers can be concluded that the impact of infrastructure is expressed as follows.
Infrastructural development and economic growth in nigeria. The study examines the role of infrastructure development in national economic growth. Development bank, in order to sustain nigerias current economic growth of 6% annum, nigeria has to do more in the area of infrastructure development. Development bank, in order to sustain nigeria s current economic growth of 6% annum, nigeria has to do more in the area of infrastructure development. Infrastructure, economic growth and poverty reduction in.
Infrastructure enables businesses to generate additional production capacity, reduce the cost of inputs in the production and transaction costs. The purpose of the study was to understand the relationship between the investment in road networks and economic development in nigeria. Failure will result in the country recording drastic decline in gdp in the years to come, due to lack of infrastructure to support growth demands. Infrastructure in nigeria until 2040 a new report published by the pardee center and the institute for security studies iss explores a series of ambitious but realistic interventions to improve economic growth and development in nigeria.
Yet, the benefits of fdi do not accrue automatically and evenly across countries, sectors and local communities. Pdf infrastructure development and economic growth nexus. Transport infrastructure improvement and economic growth. Pdf on jan 1, 2007, sheriffdeen a tella and others published telecommunications infrastructure and economic growth. Both primary and secondary data are used for the study. Chakrabarti et al 2012 examined the relationship between infrastructure and fdi in india between the year 2002 and 2007. Request pdf transport infrastructure and economic growth in nigeria the paper considered transport infrastructure and economic growth in nigeria. It appraises the role of infrastructure in economic growth and poverty alleviation in africa. Evidence from nigeria find, read and cite all the research you need on. Methodology in specifying the institutions, infrastructure and economic growth relationship in nigeria, the study adopts the specification from a study of esfahani and ramirez 2003 for developed countries. The impact of infrastructure on trade and economic growth. It covers those supporting services that help the growth of directly productive activities like agriculture and industry. However, loto 2006 19 also found that infrastructure, when measured in physical sense, impacts positively on economic growth.
The impact of road transportation infrastructure on economic growth in nigeria article pdf available april 2015 with 2,308 reads how we measure reads. Pdf infrastructure development and economic growth nexus in. Ajide1 this paper investigates the role of frazer economic freedom index on fdigrowth relationship over the period spanning 1980 through 2010. Africas economic growth and development are intrinsically linked to infrastructure. Get free research paper on effects of infrastructure on economic growth in nigeriaour project topics and materials are suitable for students in nigeria with case studies. Roads, water systems, mass transportation, airports and utilities are all examples of infrastructure. Infrastructure development is the key to nigerias economic.
Moreover, infrastructure investment can have a positive effect on growth that goes beyond the effect of the capital stock because of economies of scale, the existence of network externalities and competition enhancing effects. The contributions of infrastructure to economic development. The provision of adequate infrastructure, along with macroeconomic stability and a longterm development strategy, is one of the necessary conditions for sustainable economic and social development. Results demonstrate that improvements in transport infrastructure i. Mitsui and inoue, 1995, a sizable number of subsequent studies have reported less. Institutions, infrastructure and economic growth in nigeria. Foreign direct investment fdi is an integral part of an open and effective international economic system and a major catalyst to development. Pdf the impact of road transportation infrastructure on. This article appraises the role of infrastructure in economic growth and poverty alleviation in africa. The study has shown that infrastructure is an intermediate goods and service for the real sector and a finished goods and service for consumers.
The theoretical framework comprised solows economic growth theory and frischmanns transportation infrastructure theory. Economic analysis of capital expenditure and infrastructural. There have been several studies that have investigated the relationship that exist. Nigerias basic physical infrastructure deficit severely. The economic recovery and growth plan ergp, a medium term plan for 2017 2020, builds on the sip and has been developed for the purpose of restoring economic growth while leveraging the ingenuity.
To this end, the study highlighted the inadequacies of existing infrastructure facilities in countries of the escap region and also estimated their. Infrastructure development and economic growth nexus in. Government spending on infrastructure and economic growth in nigeria shakirat adepeju babatunde school of postgraduate studies, department of accounting, university of lagos, akoka, lagos, nigeria abstract this study aims to investigate government spending on infrastructure. Transport infrastructure and economic growth in nigeria. The relationship between infrastructure, growth and poverty is empirically robust in the macro economic and microeconomic literature as well as in the rapidly evolving randomised field evaluation studies. Nigeria entered recession in 2016 as a result of lower oil prices and production, exacerbated by militant attacks on oil and gas infrastructure in the niger delta region, coupled with detrimental economic policies, including foreign exchange restrictions.
Infrastructure has made a net contribution of around one percentage point to nigerias improved per capita growth performance in recent years, in spite of the fact that unreliable power supply held growth. The paper investigated the impact of public sector investment in transport on economic growth, using nigeria as a case study. This is because it is a major component that is required to ensure an increase in domestic productivity and attract foreign. Economic analysis of capital expenditure and infrastructural development in nigeria chukwuemeka valentine okolo1 richardson kojo edeme1 chinanuife emmanuel1 abstract infrastructural development has been the major concern of countries all over the world due to its significant impact in fostering growth. To assess the correlation between infrastructure development and economic growth to assess infrastructure inadequacies in nigeria impeding the countrys economic growth and what measures. The impact of infrastructure on trade and economic growth in. Nigeria has barely 35% infrastructure stock, way down the 70% of the gdp needed to be considered developed. India has 58%, south africa 87%, brazil 61%, china 63% thereabout. Pdf government spending on infrastructure and economic. Despite her economic growth over the years, this has not translated to economic development due to lack of infrastructure, high poverty rate, unemployment etc. Government spending on infrastructure and economic growth. A multivariate model of simultaneous equations was deployed.
Underminding it infrastructure is underminding the growth and development of nigerian economy. The impact of road transportation infrastructure on economic. Assessing the impact of infrastructure on economic growth. Foreign direct investment fdi is an integral part of an open and effective. Nigerias robust economic indicators and prosperous trade sector ensure it has tremendous growth prospects. It remains to be seen whether or not the requisite political will exists to reinvigorate growth in both economies. To assess the correlation between infrastructure development and economic growth to assess infrastructure inadequacies in nigeria impeding the countrys economic growth and what measures are being taken to address them. Infrastructure is basically the base in which economic growth is built upon. In nigeria we have limited numbers of studies that estimated the contribution of investment in transportation infrastructure on economic growth. Government spending on infrastructure and economic growth in. These observations underscore the difficulty in planning, building, and maintaining infrastructure for both socio economic progress and environmental sustainability. Determinants of economic growth in nigeria kazeem b.
The relationship between infrastructure, economic growth and poverty reduction in africa is relatively unexplored in the literature. The empirical model for the study was developed from the endogenous growth framework in which transport investment entered into the production function as input, using the ordinary least squares ols estimation technique and time series properties tests conducted on. While nigeria has made some progress in socioeconomic terms in recent years, its human capital development remains weak due to underinvestment and the country ranked 152 of 157 countries in the world bank. Relationship between infrastructure and economic growth. The relationship between infrastructure, growth and poverty is empirically robust in the macro economic and microeconomic literature as well as in the rapidly evolving randomised field. Moreover, infrastructure investment can have a positive effect on growth that goes beyond the effect of the. In most of this discussion, attention is given to the impact on economic growth. This paper attempted to investigate the impact of infrastructure on economic growth in nigeria. National policies and the international investment. A multivariate regression approach was employed to estimate augmented growth models. Nigeria and south africa will 2019 be a year of structural reform. Nigerian exports are exceeded by strong import growth. The contribution of infrastructure to nigerias economic. The main focus of this paper is to examine a wider range of evidence on the impacts of infrastructure on economic development.
Government spending on infrastructure and economic growth in nigeria shakirat adepeju babatunde school of postgraduate studies, department of accounting, university of lagos, akoka, lagos, nigeria. Methodology in specifying the institutions, infrastructure and economic growth relationship in nigeria, the study. Furthermore, the country continues to face massive developmental challenges, which include the need to reduce. This is being driven by an increasing appetite for consumer imports, while capital imports for infrastructure development have also increased. A model was specified for the purpose and secondary quarterly data was collected for the period 20002010. In nigeria under investment in infrastructural development could be a bane to her vision of becoming a top 20 economy by the year 2020. Infrastructure and economic development in subsaharan africa. Assessing the impact of infrastructure on economic growth and.
A multivariate approach article pdf available january 2012 with 1,556 reads how we measure reads. Infrastructure development and economic growth nexus in nigeria, international journal of academic research in business and social sciences, human resource. However, the results emanating from these studies have been inconclusive. Catching up with koreas level would bring about economic growth per capita up to 2. Economic analysis of capital expenditure and infrastructural development in nigeria chukwuemeka valentine okolo1 richardson kojo edeme1 chinanuife emmanuel1 abstract infrastructural. Infrastructure, economic growth and poverty reduction in africa. Nigeria and south africa, two of africas largest economies currently experiencing structural limbo, are in need of renewed growth.
There have been several studies that have investigated the relationship that exist between infrastructure development and economic growth. A mutual correlation exists between infrastructural development and economic growth in nigeria. It presents the empirical results and reports illustrative exercises highlighting their implications for africa. Infrastructure development as key to economic growth and. Infrastructure development and economic growth nexus in nigeria. Failure will result in the country recording drastic. To evaluate impact of infrastructure development past and present on nigerias future prospects and economic outlook. In nigeria under investment in infrastructural development could be a bane to her vision. Attraction of foreign investment is not an end in itself but a means to an end as its ultimate goal is to achieve economic growth. While nigeria has made some progress in socioeconomic terms in recent years, its human capital development remains weak due to underinvestment and the country ranked 152 of 157 countries in the world bank s 2018 human capital index.
The economic recovery and growth plan ergp, a medium term plan for 2017 2020, builds on the sip and has been developed for the purpose of restoring economic growth while leveraging the ingenuity and resilience of the nigerian people the nations most priceless assets. This paper has attempted infrastructural development and its effect on economic growth. Investment in network infrastructure can boost longterm economic growth in oecd countries. Aug 20, 2016 nigeria has barely 35% infrastructure stock, way down the 70% of the gdp needed to be considered developed. An empirical analysis of transport infrastructure investment. Nigeria and south africa, two of africas largest economies currently experiencing structural limbo, are in need of renewed growth drivers. The impact of transportation infrastructure on nigerias. Roads, water systems, mass transportation, airports.
Infrastructure in nigeria until 2040 a new report published by the pardee center and the institute for security studies iss explores a series of ambitious but realistic interventions to. Nigeria entered recession in 2016 as a result of lower oil prices and production, exacerbated by militant attacks on oil and gas infrastructure in the niger delta region, coupled with detrimental economic. Gdp growth turned positive in 2017 as oil prices recovered and output stabilized. The relevance of infrastructure to growth and poverty. Africas economic growth and development are intrinsically linked to infrastructure development, but it is the pushpull relationship with commodities that has become the driving force for infrastructure development.
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