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IMPACT OF LOGISTICS INFRASTRUCTURE ON MANUFACTURING SECTOR PERFORMANCE IN AFRICA: Lessons for Nigeria

IMPACT OF LOGISTICS INFRASTRUCTURE ON MANUFACTURING SECTOR PERFORMANCE IN AFRICA: Lessons for Nigeria

 

Abstract: In spite of its role in achieving sustainable growth, the manufacturing sector continues to perform abysmally in African countries, including Nigeria. This situation has resulted in a continued search for policy initiatives to address the problem of manufacturing deficit in the region. This study assessed the impact of logistics infrastructure, which has received very little attention in literature, on manufacturing sector performance in Africa. An unbalanced panel data for 32 African countries between 2007 and 2016 were analysed using system GMM estimation technique. The result showed that logistics infrastructure has positive and significant impact on manufacturing sector performance. An increase in logistics performance index (LPI) by 1 point or 20 would result in an increase in the performance of manufacturing sector by a range of 3.61- 7.48, depending on the component of logistics infrastructure used. Thus, logistics infrastructure improvement should constitute one of the industrialization strategies of African countries.

JEL classification: L90; O14

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