Econometric analysis of public infrastructure, urbanization, and unemployment nexus in Nigeria

Abstract

This study examined the relationship between public infrastructure, urban population growth, and unemployment in Nigeria by utilising annual time series data from the Debt Management Office (DMO), World Bank, World Development Indicators (WDI), and Central Bank of Nigeria (CBN) Statistical Bulletin. The number of paved roads (PRD), water supply infrastructure (WSI), electric power supply (EPS), and telecommunication infrastructure (TCI) served as proxies for infrastructure, while the rate of unemployment served as the dependent variable. The variables were subjected to a stationarity test using Augmented Dickey-Fuller (ADF) while the autoregressive technique was used as its main estimation technique. The long-run cointegration relationship was found, and its significance was assessed by calculating the bound cointegration. The study found that, despite the erratic effects of interest rates, paved road kilometres had a negative impact on unemployment, whereas infrastructure related to the provision of electricity had a favourable impact. To reduce unemployment in Nigeria, the study advises that concerted efforts be made by the government, the private sector, investors, corporate entities, and stakeholders to enhance the availability of electric power supply, the calibre of road infrastructure, and telecommunications facilities.