The Effect of Infrastructural Investment on Sustainable Development in Nigeria (1980-2016)

Sustainable development requires not only satisfying the need of the present generation but also to preserve the environment and meet the need of generations to come.We examined the effect of infrastructural investment on sustainable development by investigating the causality relationship between infrastructural investment and sustainable development and analyze the relative effect of social and economic infrastructure on sustainable development in Nigeria. Based on ex post factor research design and following Romer (1986) growth model framework sustainable development was a function of gross fixed capital formation, social infrastructure and economic infrastructure. The study utilized annual time series data covering 1980 to 2016 from Central Bank of Nigeria Statistical Bulletin while the Granger causality and Fully Modified Ordinary Least Squares (FM-LS) technique was used in the estimation.It was found that gross fixed capital formation and economic infrastructure exert a significant positive effect on sustainable development while social infrastructure exerts a significant negative effect on sustainable development in Nigeria. Also, a uni-direction causality relationship between sustainable development and infrastructural investment was found which runs from fixed capital formation, social infrastructure and economic infrastructure to sustainable development growth.We conclude that, though infrastructure has effect on sustainable development in Nigeria, the effect of each of its two components on sustainable development differs. As a policy measure, government needs to raise investment in infrastructure and broaden the sources of finance for infrastructure and ensure efficient allocation of public resources. Also, there is the need to revitalize public-private partnership on social infrastructure to engender sustainable economic growth in Nigeria.