Infrastructure, Fdi and Manufacturing Exports in Africa: a Firm Level Infrastructure Analysis

The primary aim of this study was to investigate the role that is played by the quality of infrastructure on export participation and on foreign direct investment using firm level data and employing maximum likelihood techniques like the Tobit and Probit models. Results show that firm size, foreign ownership, internet access, international distance, electricity, customs and generator ownership matter in influencing export participation. Thus the reason why very few firms in Africa are outward oriented is partly because of poor market access and poor electricity and customs infrastructure. In the case of foreign direct investment results show that foreign firms are attracted to a market, bigger in size and that market access is also very important. These results also show that a big market in an environment characterized by acute power problems negatively affects market seeking FDI. In light of these findings, there is need therefore for the government in collaboration with multilateral institutions like the World Bank, United Nations etc mobilise resources to improve Africa?s infrastructure facilities particularly customs, power and international transport facilities.