IMPACT OF ECONOMIC INFRASTRUCTURE INVESTMENT ON ECONOMIC GROWTH IN NIGERIA
Keywords:Co-integration, Economic, Growth, Infrastructure and Investment
The study examines the impact of economic infrastructure investment on economic growth in Nigeria using data from 1980 to 2021. Real gross domestic product was used as proxy for economic growth. The RGDP was specified as a function of government expenditure on road transportation infrastructure, telecommunication infrastructure, electricity infrastructure and water supply infrastructure. An Autoregressive Distributed Lag (ARDL) model was applied with 4 lags on the maximum dependent variables and co-integration to examined the impact and the long run relationship between dependent and independent variables. The stationarity test carried out, using Augment Dickey-Fuller (ADF) revealed that all the variables were all stationary at first difference 1(1), implying that the variables contains unit root and statistically significant at both 1 percent and 5 percent level of significance. Results of the parameter estimates based on the most consistent and efficient estimation; it was discovered that road transportation infrastructure were found to have positive but statistically insignificant with the estimated coefficient of 0.075947 (p=0.043 <0.05). It was equally discovered that telecommunication and water supply infrastructure were found to have strong positive and statistically significant with estimated coefficient of 0.077978 (p= 0.033<0.05 and 0.076723 (p=0.134>0.05) respectively. While electricity infrastructure was found to have a negative and insignificant relationship with economic growth with estimated coefficient of -0.051186 (p=0.044 <0.05). The estimation showed that all the variables are co-integrated; meaning that there exists long run equilibrium relationship among the variables. Thus, it was recommended that for Nigeria to achieved infrastructure development to triggered economic growth and development, government should increase its budgetary allocation on the various components of infrastructures for development.
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