This study examines the impact of infrastructure and outward-orientation development strategy on the development of Sub-Saharan African economies. Three structural models were estimated using two-stage least squares (2SLS) method, and the results indicate that infrastructure is a significant determinant of per capita GDP in SSA. The elasticities of the coefficients of per capita GDP with respect to telephone, power and road are 0.19, 1.01 and 0.14 respectively. The adjustment expression and the initial gap expression for infrastructure are positive and significant. The estimated convergence rate is about 2.34%. However, the primary export/GDP ratio is positive but not statistically significant. The study suggests that it is time to rethink and there is a need to shift to the new development policy agenda that focuses on domestic demandled growth with emphasis on good governance that supports domestic growth drivers, large-scale investment in power, transport, and Information and Communication Technology (ICT) systems and other forms of soft and hard infrastructure, and encourages competitiveness and diversification towards higher value-added goods and services with greater technological content.

Infrastructure is critical to the growth and development of African economies. In recognition of this, the Commission for Africa (2005) observed that poor transport network (roads, rail, ports, and air), inefficient energy supply, poor telecommunications and communication technology, and other infrastructure are a few of the chief constraints to economic growth in Sub-Saharan Africa (SSA).

The links between infrastructure services, growth and social outcomes operate through multiple channels. But many of the benefits of infrastructure services accrue to firms which are said to consume two-thirds of all infrastructure services (Estache et al., 2004). Thus, it is through the provision of quality, efficient, and accessible infrastructure that costs are lowered and, most importantly, market opportunities are expanded (especially through telecommunications and transport). But at the moment, the bulk of the electricity supply is unreliable and subject to power rationing or unscheduled cuts. Africa’s export diversification drive is getting slowed down by poorly functioning energy infrastructure (UNDP, 2007 and 2009a). Geographical disadvantages, which include land-lockedness and poor infrastructure, have led to higher transport costs for capital goods, which are largely imported. Transport-related impediments make it extremely difficult to deliver goods to the market at competitive prices.

Managerial Economics Journal, Economics of Cloud Computing, Information and Communications Technology Sector, European Economy, Macroeconomic Models, European Small and Medium Size Enterprises, SMEs, Government Agencies, European Health Sector, e-business Skills, Cost Reduction Process, Macroeconomic Literature, Online Services.