Investigating the Economic Effects of the Supply and Demand for Infrastructure in West Africa: Emerging Insights from a Simultaneous Analysis

Abstract

The study investigates how infrastructure affects the economic growth of West Africa while considering the issues of endogeneity and simultaneity. Data was collected from 2005 to 2022 and nonlinear three-stage least squares GMM methods were used to make the infrastructure variable endogenous, while examining different kinds of infrastructure models. It was revealed that aggregate infrastructure supports and enhances economic growth. The transportation, energy, ICT, and water and sanitation components of infrastructure give unique support to economic growth. The study showed that the amount of industrial activity and fiscal balance in the West African region was not adequate to influence the trajectory of the demand and supply of infrastructure. It is suggested in the study that West African nations should invest in infrastructure that promotes and speeds up their economic growth. This study gives important information for shaping growth strategies and creating a base for making and carrying out economic policies.