Infrastructural Development and Real Sector Performance in ECOWAS Countries: An Aggregated and Disaggregated Approach

Abstract

This study examined the effects of infrastructural development on real sector performance in the ECOWAS region from 2000 to 2021 using the aggregated and disaggregated approaches. While taking the real sector to mean the aggregation of the agricultural and manufacturing sector performance, infrastructural development was measured using the following indices: access to electricity; transport index; access to ICT services; access to water; land area available for agriculture (% of total land). Other control variables include capacity utilization, foreign direct investment and financial sector development. The broad objective of the study was to examine the impact of infrastructural development on aggregated real sector performance in the ECOWAS region. The specific objectives include: to determine the effect of infrastructural development on aggregated real sector performance in the ECOWAS countries, to ascertain the impact of infrastructural development on disaggregated agricultural sector performance in the ECOWAS region; to determine the impact of infrastructural development on agricultural sector employment in the ECOWAS region; to evaluate the impact of infrastructural development on disaggregated manufacturing sector performance in the ECOWAS region and to examine the impact of infrastructural development on manufacturing sector employment in the ECOWAS region. Secondary time series data were used for the study and they were sourced from World Development Indicators (WDI) and the Africa Infrastructure Development Index (AIDI). Five models were specified to capture the broad objective and the specific objectives respectively. The estimation process began with a descriptive statistics of the data set. A panel unit root test was conducted using the Levin, Lin & Chu test.