Infrastructural development and Economic growth: A Case study of the SADC region

Master Thesis


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The development of services and the infrastructure may bring about the sustainability of regional trade, investment, and economic development. Adequate infrastructure is a key element required in growth and productivity (Cesar & Serven, 2004). The availability of sound regional infrastructure will support the SADC to attain a minimum of 7% economic growth. Consequently, opportunities are then created for exports and imports, markets, labour, and highquality services and products through infrastructural development in SADC economies. Insufficient infrastructure pressures trade, which in turn surges the price of executing business, causing the region to be unappealing to potential investors, which then discourages economic growth (Dube, 2013). The infrastructure has been responsible for over half of sub-Saharan Africa's latest increased growth and accomplishment; and it has additional untapped possibilities (Gutman et al., 2015). The issue then is why the SADC members are experiencing low economic growth and weak competitiveness, when so many infrastructural development projects have been implemented. Consequently, the study then is seeking to examine the impact brought in by infrastructural development in SADC on its economic growth. To accomplish this a Panel Autoregressive Distributed Lag model was used on a sample of five countries, covering the period of 2003 to 2020, based on the availability of the data. The findings of the study highlighted the fact that infrastructural development is an enabler of economic growth and development. The results concluded that infrastructural development enhances the economic growth in the SADC region; and these findings are in line with those of Kodongo and Ojah (2016), who found that infrastructural development positively affects economic growth. Furthermore, from these findings, it may be noted that the different types of infrastructure (that comprise Transport, Electricity. ICT and WSS) all have a positive impact in relation to economic growth, such as the findings, supported by Estache and Wren-Lewis (2016). Given the findings of the study, the possible recommendation is that SADC member state governments must put in place policies that would attract more infrastructural development funding and make budgetary provisions for infrastructural development. Lastly, future studies on infrastructural development and economic growth need to factor in the role of quality in institutions, as well as an interaction term, between institutional quality and infrastructure, in order to capture the various country-specific effects.