Infrastructure and Economic Growth Nexus in Nigeria: A Macroeconometric Modelling Approach
Keywords:
Infrastructure, Causality, Economic Growth, Economy of Nigeria, Macroeconometric Modeling.Abstract
This paper investigated the impact of infrastructure on economic growth in
Nigeria A multivariate model of simultaneous equations was deployed. The
paper also utilised three-stage least squares technique to capture the
transmission channels through which infrastructure promotes growth. The
research covered 40 years (1970 to 2010). The finding shows that
infrastructural investment has a significant impact on output of the economy
directly through its industrial output and indirectly through the output of
other sectors such as manufacturing, oil and other services. The agricultural
sector is however not affected by infrastructure. The results also show a bidirectional causal relationship between infrastructure and economic growth.
The paper recommended increased investment in infrastructure. Also, the
financing options for closing Nigeria’s infrastructure gaps should focus on
broadening the sources of finance and a better allocation of public resources.
In this wise, the government should intensify the utilization of the public private-partnership (PPP) framework.
