Assessing and Modeling The Impact of Urbanization on Infrastructure Development in Africa: A Data-Driven Approach

Abstract

Africa has recently experienced significant infrastructure endowments alongside unprecedented urbanization, leading to increased demand for infrastructure services. This paper empirically examines the relationship between urban infrastructure and urbanization across 42 African countries from 2005 to 2021. Utilizing panel data, we employ a 2-step system Generalized Method of Moments (GMM) approach, with six specifications based on infrastructure type. The findings indicate that (i) the impact of urbanization on infrastructure development varies by infrastructure type, generally showing a positive effect; (ii) economic growth enhances all infrastructure types, with a 10 % increase in GDP leading to a 4.2 % improvement in broadband infrastructure; (iii) industrial production's effects are mixed across infrastructure types; and (iv) trade openness has a dual influence, positively affecting overall infrastructure and most ICT components, while negatively impacting fixed broadband subscriptions and electricity infrastructure. Additionally, a cluster-based analysis is conducted to simulate infrastructure development, categorizing variations in development stages and configurations. The study discusses policy implications derived from these findings.