Infrastructure and Economic Growth Nexus in Nigeria: A Macroeconometric Modelling Approach

This paper investigated the impact of infrastructure on economic growth inNigeria A multivariate model of simultaneous equations was deployed. Thepaper also utilised three-stage least squares technique to capture thetransmission channels through which infrastructure promotes growth. Theresearch covered 40 years (1970 to 2010). The finding shows thatinfrastructural investment has a significant impact on output of the economydirectly through its industrial output and indirectly through the output ofother sectors such as manufacturing, oil and other services. The agriculturalsector 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, thefinancing options for closing Nigeria’s infrastructure gaps should focus onbroadening 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.