THE ROLE OF INFRASTRUCTURE DEVELOPMENT ON NATIONAL ECONOMIC GROWTH: A CASE STUDY OF THE TELECOMMUNICATION SECTOR IN NIGERIA (2000-1-2010-4)
ABSTRACT
The study examines the role of infrastructure development in national economic growth. A model was specified for the purpose and secondary quarterly data was collected for the period 2000-2010. The objective of this research was primarily to investigate the level of telecom infrastructure development on the Nigeria economy. Statistical technique of ordinary least square (OLS ) was employed for the estimation. Our result shows that developments in telecommunications sector provided by teledensity have positive and significant impact on economic growth in Nigeria. We recommend that increased infrastructure development in the telecommunications sector, and greater deregulation for competition among operations will bring about sustained economic growth.
CHAPTER ONE
1.0. INTRODUCTION
1.1 BACKGROUND OF STUDY
It takes little analysis to see that infrastructure plays a major role in the economy of a country, whether developing or developed. The need for good infrastructure management is of great importance to the economics of countries all over the world and the various sectors of the economy need to be understood. The world is fast becoming a global village and a necessary tool for this process is communication of which telecommunication is a key elements. Development in the telecommunication industry all over the world is very rapid as one innovation replaces another in a matter of weeks.
Nigeria is part of this race for rapid developments, as the years of economic reversal via mismanagement have had adverse effects ton its rate of growth and development. The Nigeria telecommunications sector was grossly underdeveloped before the sector was deregulated under the military regime in 1992 and placed under the jurisdiction of the Nigeria Communication Commission (NCC) since then, the NCC has issued various licenses to private telephone operators. These licenses allow private telephone operators (PTO) to roll out both fixed wireless
telephone lines and analog mobile phones. The return of democracy in 1990 however paved the way for the granting of GSM licenses to three service providers, MTN, ECONET (which is now AIRTEL) and NITEL Plc in 2001 with GLOBACOM joining in 2003. Telecommunication is a major driver of any economy infrastructure which is therefore regarded as a vital instrument in ensuring economic development. Attention this work would be focused on this area of Endeavour, as it appears to be one of the most neglected areas of economic development goals in most countries today.
1.2 SIGNIFICANCE OF THE STUDY
The provision of infrastructure services to meet the demands of business, household and other users is one of the major challenges of economic development.
The provision of economic infrastructure can expand the productive capacity of the economy by increasing the quantity and quantity of such infrastructure. The transformation curve or the production possibility frontier or curve would shift with the expansion of the economic infrastructural base, thereby accelerating the rate of economic development and enhancing the pace of socio-economic
development. Better management of economic infrastructure would have positive output, income and employment effects on the economy. Moreover, it will impact directly on the poor, thus reducing poverty. Education as well as telecommunication is a very important source of economic growth. It is also an economic investment since it enhance the stock of human capital.
Road infrastructure has been found to be a significant factor of economic growth and development. The development of seaports as an economic infrastructure assumes that like roads, communications and other economic infrastructure ports have a positive impact on the growth and developments of countries. Without ports the Americans might not have been easily explored. Today, the United States of America is one the leading economic global power. Seaports are an economic infrastructure with significant multiplier effects on the domestic economy. Infrastructure will provide benefits to rich and poor equally because of the non-exclusionary nature of the consumption of public goods and services it provides. To the extent that infrastructure improves the quality of life for the poor; the development of infrastructure is likely to alleviate
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