Infrastructure and the Path to Sustainability: How Governance Shapes Development Outcomes in Africa

ABSTRACT Infrastructure development, as an SDGs objective, foster inclusive growth by improving access to transport, energy, and digital systems, enhancing productivity, connectivity, resilience, and sustainability while reducing inequalities and supporting environmental goals. This study examines the impact of infrastructure development on sustainable development, focusing on the mediating role of governance across 42 African nations. The insightful findings are obtained using the fixed effect with Driscoll/Kraay, System GMM, and smoothed instrumental‐variables quantile regression (SIVQR) methods. The analysis reveals that while infrastructure development initially enhances sustainable development, diminishing returns emerge as overinvestment leads to inefficiencies and resource misallocation, ultimately reversing this trend. This finding suggests an inverted U‐shaped relationship between infrastructure development and sustainable development, a result that remains robust even after accounting for income differences. Interestingly, robust governance in Africa not only strengthens sustainable development outcomes but also amplifies the impact of infrastructure development, enhancing both its linear and squared effect on sustainable development. These findings underscore the need for a comprehensive policy approach that balances infrastructure investment with sustainability. This entails integrating renewable energy, smart grids, and low‐carbon transport systems while ensuring governance reforms that enhance transparency and accountability. Additionally, policymakers must prioritize equitable investment distribution to prevent regional disparities and maximize inclusive growth.