Infrastructural development and governance contributions to manufacturing capacity utilization in West Africa

Despite infrastructure investments in West African countries, the manufacturing sector still operates below its productive potential. Thus, this study explores the extent to which infrastructure and governance affect manufacturing capacity utilization in West African countries. The study uses three forms of infrastructure (transport, digital, and energy) and examines the conditional effects of their influence on capacity utilization based on the indicators of governance. Panel data (2002–2023) on the 16 West African countries were analyzed using the fully modified ordinary least squares (FMOLS) method, and three key results were obtained. First, energy and transport infrastructure exert significant and positive impacts on manufacturing capacity utilization, with electricity reliability and efficient logistics clearly identified as the most binding industrial constraints in the region. Second, in isolation, there is a negative relationship between governance variables; however, when interacted, the relationship between the governance variables and infrastructure is significantly positive. This thus validates the stance that institutions are multipliers of the industrial effects of infrastructure. Third, digital infrastructure may not always enhance the utilization of capacity; however, with enhanced governance and related industrial policy, its contribution also becomes positively significant. The study contributes to Sustainable Development Goals 8, 9, and 10.