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Productive capacity has emerged as a critical indicator of long-term economic development,
particularly for regions undergoing rapid structural transformation, such as Sub-Saharan Africa (SSA).
Despite increasing global interest, the key drivers of productive capacity in SSA remain insufficiently
explored, especially within the context of tourism and migration. Existing studies predominantly rely on
GDP-based growth models and often examine tourism and migration separately, overlooking their
combined influence on structural development. Moreover, the role of institutional quality in shaping
productive capacity is under-investigated. This study examines how international tourism and migration
affect productive capacity growth in SSA, while also considering the contributions of urbanization, trade
openness, and institutional quality. Using panel data from 38 SSA countries between 2011 and 2021, the
analysis employs a dynamic System Generalized Method of Moments (System GMM) estimator to
address endogeneity, unobserved heterogeneity, and simultaneity among variables. The results indicate
that international tourism and migration exert positive and statistically significant effects on productive
capacity. Institutional quality emerges as the most influential driver, followed by urbanization and trade
openness. These findings underscore the importance of structural and governance-related factors in
enhancing the region’s productive capacity. Tourism and migration contribute meaningfully to productive
capacity growth; however, their impact is substantially conditioned by the quality of governance and
structural enablers. Policymakers should adopt sustainable tourism strategies, strengthen security and
infrastructure, develop migration-friendly frameworks, enhance human capital, and prioritize
institutional reforms to maximize long-term productive capacity in SSA.
