Home / Articles
Energy Infrastructure, Capacity Utilization and Manufacturing Sector Performance in ECOWAS Countries
Most developing countries (ECOWAS Countries inclusive) are faced with an underdeveloped manufacturing sector, and this has continued to hinder economic growth. Their main objective has been to achieve and sustain viable manufacturing sector performance. To get this accomplished, emphasis has been on enhancing infrastructural development and capacity utilization. Previous research efforts have centred on country effects of infrastructural development, capacity utilization and manufacturing sector performance. Some other studies examined the economic growth effects of infrastructural development. This study differentiates itself by examining the nexus between energy infrastructures, capacity utilization and manufacturing sector performance in the ECOWAS region, using the GMM estimation technique on ECOWAS countries’ data covering 2000-2021. The variables of the model included manufacturing sector performance, energy infrastructure, average manufacturing capacity utilization; financial sector development and foreign direct investment. The findings are indicative of the fact that energy infrastructure (proxy with percentage of the population with access to electricity), average manufacturing capacity utilization and foreign direct investment have a significant and positive relationship with manufacturing sector performance (proxy with manufacturing value added) in ECOWAS countries. Financial sector development has a positive but insignificant effect on manufacturing sector performance in the region during the period under review. The finding again brings to the fore the impact of adequate investment in infrastructures (especially energy infrastructures) on manufacturing sector performance in the ECOWAS region.
Keywords: Energy Infrastructure, Capacity Utilization, Manufacturing Sector Performance.
