Transport Infrastructure Investment On Economic Growth In Kenya

Abstract

The study sought to analyze transport infrastructural investment effect on economic growth and investment effect of various modes of transport on economic growth in Kenya using the Autoregressive Distributed Lag and the Vector Autoregressive models. In both models, annual data was used. Data for the parameters that were fitted on the ARDL model ranged from 1984 to 2017 while the data for the parameters on the VAR model ranged from 2001 to 2017. The findings reveal that capital investment in transport and the rate of inflation has significant effect on economic growth while labour wage employment has an insignificant effect. It is also revealed that investments in road, railways and air have significant effect on economic growth with incremental investments in road and railways having positive effects while air had a reverse effect. Investments in marine were found to be insignificant. It is concluded from the study that there is need to increase budgetary allocations to expand the available transport infrastructure. It is recommended that future studies should focus on the effect of external debts on transport infrastructure.