Abstract: This study investigated the macroeconomic impact of private sector financing of public infrastructure on sustainable economic development, specifically examining the moderating role of institutional quality in Nigeria and South Africa. The study adopted an ex-post facto research design, utilizing annual time-series data from 2000 to 2024 sourced from the African Infrastructure Development Index and the World Bank’s World Development Indicators. Data were analyzed using Augmented Dickey-Fuller unit root tests, Johansen Cointegration, and Ordinary Least Squares (OLS) regression at the 0.05 level of significance. The empirical results revealed a negative direct relationship between private technology infrastructure financing and Gross Domestic Product (GDP) in both Nigeria (β = -0.2981, p = 0.0003) and South Africa (β = -0.0627, p = 0.0023). However, interaction models utilizing Principal Component Analysis (PCA) constructed Institutional Quality (INQ) index revealed a comparative divergence. In Nigeria, weak institutional quality exacerbated the negative macroeconomic outcomes of technology financing (β = -0.0129, p = 0.0002). Conversely, South Africa’s relatively robust institutional quality completely reversed the negative trajectory, transforming private technology financing (β = 3.4238, p = 0.0014) and education financing (β = 0.0069, p = 0.0052) into massive catalysts for GDP growth. The study concluded that private infrastructure financing is not an automatic catalyst for economic growth; institutional quality is the critical moderating factor of its success. Recommendations include enforcing mandatory local content frameworks and anti-rent-seeking procurement systems in Nigeria, and continuing to reinforce regulatory independence and curriculum alignment in South Africa.

Keywords: Gross Domestic Product, Institutional Quality, Macroeconomic Growth, Private Infrastructure Financing, Public-Private Partnerships, Sub-Saharan Africa

Pages: 1443-1453