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Article Title:
External Capital Financing And Infrastructural Development Of West African Countries: An Impact Analysis
by Anidiobu, Gabriel A., Ph.D., Okolie, Paschal I.P., Ph.D. & Onyia, Chinedu C., Ph.D.

Abstract:
This work is an impact study of external capital financing on infrastructural development of West Africa (WA) countries for a-32 year period (1986-2017). External capital financing was measured by external loans (EXLs), while gross fixed capital formation (GFCF) became proxy for infrastructural development. Five unit root test criteria: Levin, Lin & Chu t; Breitung t-stat; Im, Pesaran and Shin W-stat; ADF-Fisher Chi-square, and PP-Fisher Chi-square were used to confirm stationary traits of the variables. Normal distributive pattern of the series was figured out with descriptive statistics. Panel least square (PLS), together with the Hausman test, the random effect (RE) estimator was used as a preferred analytical technique. The findings showed that external loans had a negative, but significant impact on gross fixed capital formation. The economic implication was that the state of infrastructures in WA was not enhanced by means of external capital within the sample period. The study recommended that governments of WA countries should minimize cost of governance as an antidote to post covid-19 Africa; refrain from external debt as much as possible, but since debt is inescapable, it should be used for productive investments or growth-enhancing investments rather than maintaining their spending plans. Prudent application of borrowed funds should form part of fiscal responsibility of African leaders in order to concretize critical investment decisions.

Keywords: External Capital Financing, Infrastructural Development, Panel Least Square, West Africa

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