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The Effect of Infrastructural Investment on Sustainable Development in Nigeria (1980-2016)

Author

Listed:
  • Walid Gbadebo Adebosin

    (Department of Business Education, Michael Otedola College of Primary Education, Noforija-Epe, Nigeria)

  • Anu Keshiro Toriola

    (Department of Economic, Hallmark University, Ijebu-Itele, Nigeria)

  • Lateef Abiodun Salami

    (Department of Business Education, Michael Otedola College of Primary Education, Noforija-Epe, Nigeria)

  • Dele Taiwo Saula

    (Department of Business Education, Michael Otedola College of Primary Education, Noforija-Epe, Nigeria)

  • Ayanyemi Adeyemi Ayanwole

    (Department of Economic, Chrisland University, Abeokuta, Nigeria)

Abstract

Sustainable development requires not only satisfying the need of the present generation but also to preserve the environment and meet the need of generations to come.We examined the effect of infrastructural investment on sustainable development by investigating the causality relationship between infrastructural investment and sustainable development and analyze the relative effect of social and economic infrastructure on sustainable development in Nigeria. Based on ex post factor research design and following Romer (1986) growth model framework sustainable development was a function of gross fixed capital formation, social infrastructure and economic infrastructure. The study utilized annual time series data covering 1980 to 2016 from Central Bank of Nigeria Statistical Bulletin while the Granger causality and Fully Modified Ordinary Least Squares (FM-LS) technique was used in the estimation.It was found that gross fixed capital formation and economic infrastructure exert a significant positive effect on sustainable development while social infrastructure exerts a significant negative effect on sustainable development in Nigeria. Also, a uni-direction causality relationship between sustainable development and infrastructural investment was found which runs from fixed capital formation, social infrastructure and economic infrastructure to sustainable development growth.We conclude that, though infrastructure has effect on sustainable development in Nigeria, the effect of each of its two components on sustainable development differs. As a policy measure, government needs to raise investment in infrastructure and broaden the sources of finance for infrastructure and ensure efficient allocation of public resources. Also, there is the need to revitalize public-private partnership on social infrastructure to engender sustainable economic growth in Nigeria.

Suggested Citation

  • Walid Gbadebo Adebosin & Anu Keshiro Toriola & Lateef Abiodun Salami & Dele Taiwo Saula & Ayanyemi Adeyemi Ayanwole, 2019. "The Effect of Infrastructural Investment on Sustainable Development in Nigeria (1980-2016)," Business & Management Compass, University of Economics Varna, issue 2, pages 148-163.
    • Handle: RePEc:vrn:journl:y:2019:i:2:p:148-163
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    Cited by:

    1. Yakubu Suleiman & Adeyemi Ajayi & Sule Abass & Ogunbajo Rukaiyyat, 2020. "The Relationship Between Road Infrastructure Budgetary Expenditures and Commercial Property Investment Returns. Case Study of Fadikpe Area Minna, Nigeria," Baltic Journal of Real Estate Economics and Construction Management, Sciendo, vol. 8(1), pages 187-196, January.

    More about this item

    Keywords

    Infrastructure; Development; Sustainable Development; Capital formation; Growth;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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