Building Opportunities : Addressing Africa's Lack of Infrastructure (original) (raw)
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Oxford Handbooks Online, 2014
This chapter discusses the role of infrastructure in the process of economic growth and human development in Africa. Part 1 discusses the geographical, physical and institutional challenges faced by the development of infrastructure. Part 2 discusses the coverage of modern infrastructure services and access by households. Coverage differs greatly across sectors and countries but is, on average, very low by international standards. Part 3 discusses the institutional and regulatory constraints that create an "infrastructure gap." Part 4 discusses the financing needs to develop Africa's infrastructure. The challenge of finding funds for infrastructure is gigantic and varies greatly by country: fragile states face an impossible burden and resource-rich countries lag despite their wealth. Part 5 discusses how to face the challenges and overcome economic and institutional constraints. reflects a combination of insufficient and inefficient spending both in capital expenditures and in operations and maintenance. Many African countries are poor and cannot mobilize resources for the purpose of improving infrastructure. When resources are mobilized, they are often spent in a very inefficient way. Many governments, faced with competing priorities or difficult fiscal situations, simply do not or cannot allocate the resources needed to reach desirable levels of access or quality. In addition, infrastructure services often are public goods or natural monopolies (or both) and, as such, are either run or regulated by public entities and suffer from the inefficiencies that are common to public services.
Building on progress: Infrastructure development still a major challenge in Africa
2016
Infrastructure is a bedrock for development. As an essential part of a supportive environment for investment and livelihood, adequate infrastructure promotes economic growth, reduces poverty, and improves delivery of health and other services (World Bank, 2014; Wantchekon, 2014). The African Development Bank (AfDB), whose Strategy for 2013-2022 makes infrastructure development one of its five operational priorities, notes that “Africa still has massive infrastructure needs” yet invests only 4% of its gross domestic product (GDP) in infrastructure, compared to China’s 14% investment. The AfDB estimates that “bridging the infrastructure gap could increase GDP growth by an estimated 2 percentage points a year” (African Development Bank, 2013).
Effectiveness of Infrastructure Project Investments in Africa_final version
2015
This paper studies the impact of various types of infrastructure investment on GDP per capita growth conditional on institutional advancement and foreign co-financing in five African countries (Egypt, Morocco, Tunisia, Namibia and South Africa) for the period 1990-2010. Our results show that African countries with sustainable infrastructure projects are more likely to grow faster and achieve higher quality of living standards. Second, in a less corrupt environment infrastructure projects are long-term sustainable. In other words, with more advanced institutions infrastructure projects in the same sector can be expected to have longer sustainability than similar infrastructure projects in a more corrupt African country. This implies that institutional environment in individual countries matters and serves as a structural determinant of infrastructure projects sustainability and overall quality. These results, however, are significant only for investment into roads and railroads, but ...
FINANCING AFRICAN INFRASTRUCTURE Can the World Deliver
2015
In 2009, the World Bank and major donors and multilateral institutions investigated the challenge of addressing sub-Saharan Africa's lack of infrastructure. That comprehensive regional analysis aimed to establish “a baseline against which future improvements in infrastructure services can be measured” and guide priority investments and policy reforms. The analysis estimated that the region needed $93 billion per year to fill the infrastructure gap. The purpose of this paper is to analyze how the main sources of infrastructure financing have evolved over the last eight years, the distribution of that financing by country and sector, and how financing efforts have responded to the recommendations made in 2009. The paper begins with an analysis of the three major sources of external financing: private participation in infrastructure (PPI) investments; official development finance (ODF) from multilateral institutions and most of the Organisation for Economic Cooperation and Developm...
More fiscal resources for infrastructure? Evidence from East Africa
2007
Infrastructure Performance East Africa's infrastructure performance is generally lack-luster when compared against the relevant peer groups. As a result both households and enterprises are seriously under-served. Households have relatively good access to improved water and sanitation, but coverage of electricity is extremely low. Electricity coverage (of little more than 10% on average) lags substantially behind even the already low benchmarks of around 30% for Sub-Saharan Africa and Low Income Countries as a whole. Moreover, the rate of coverage expansion (at 0.6% per year) is also well behind the benchmarks (of around 1.2% per year), suggesting that this gap will only get larger over time. The coverage situation with respect to water (60-70%) and sanitation (40-50%) is much better, with most countries outperforming their peer group. East Africa is also making brisk progress in expanding coverage to improved water sources over time suggesting that this lead will continue, although unfortunately the same cannot be said for sanitation. Enterprise surveys confirm that reliability of power supply is the most severe infrastructure problem from a business perspective. Some 50-80% of manufacturing firms identify it as such, which is well above the average for Low Income Countries as a whole. They report 70-80 days of power outages each year, leading to losses valued at 10-20% of total sales. Transport infrastructure is the next most pressing constraint from a business perspective. Indeed, East African manufacturers report that 2-3% of their cargo is lost in transit, which is about double the average for the Low Income Country peer group. Business dissatisfaction with telecommunications infrastructure is substantially lower than for the other services (5-25%), with the important exception of Kenya (44%). Are Countries Spending Enough on Infrastructure? Current levels of infrastructure spending are high as a percentage of GDP, but remain low in absolute terms. Average annual public spending on infrastructure in East Africa ranges between 5% (Rwanda) and around 10% (Kenya) of GDP, but in general has been converging towards the 6-8% of GDP range. In absolute terms, this amounts to little more than US$20 per capita per year on average. Given both its higher GDP and its larger GDP share devoted to infrastructure, Kenya has by far the largest infrastructure budget in the region. At over US$40 per capita per year this is more than four times the equivalent expenditure in Rwanda. The share of central government spending that is allocated to infrastructure has been rising in recent years, and is now in the 10-20% range. Comparable expenditure figures for middle income countries are at least ten times higher in absolute terms. Relative to middle income countries in Latin America and the Middle East for which comparable data is available, East African countries dedicate on average a slightly higher share of GDP to public spending on infrastructure (7%
Investing in Africa’s Infrastructure: Financing and Policy Options
Annual Review of Resource Economics, 2015
Africa has a severe shortage of infrastructure. Addressing this shortage involves both correcting the problems of poor maintenance and underinvestment that have caused it and raising the finance for a phase of remedial investment. We review evidence that substantiates the shortage, in terms of both stocks and the potential for high rates of return. We then turn to the range of options for attracting remedial finance, focusing in particular on how they relate to the region's endowment of natural resources. Governments will need to build the regulatory and technical capacities to tap into this opportunity for leveraged private capital flows by reducing the risks associated with large, capital-intensive projects. Furthermore, governments must build the authority necessary to manage both the challenges associated with deferred public consumption and the time consistency needed to support long-term ventures.
Infrastructure Development in Sub-Saharan Africa: A Scorecard
Policy Research Working Papers
The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
2011
Unit of the Public Investment Department (PID) of the Ministry of Finance and Economic Planning (MOFEP) and with support from the World Bank and Public Private Infrastructure Advisory Facility (PPIAF). The la er is a multidonor technical assistance facility aimed at helping developing countries improve the quality of their infrastructure through private sector involvement. The authoring team of Riham Shendy, Zachary Kaplan, and Peter Mousley would like to thank the MOFEP and the PFA Unit for their collaboration and guidance on this study. We would also off er our deep thanks to the Federal Government of Nigeria (FGN), specifi cally the Infrastructure Concession Regulatory Commission (ICRC), and the governments of Kenya, Senegal, Côte d' Ivoire, and Cameroon. Input for this report for the Francophone countries was made possible by the background report completed by Axelcium Consultants and for the Anglophone countries from Benjamin Darche and Thomas Cochran. We extend our thanks to our colleagues at PPIAF who provided the resources for this study. World Bank staff who have also provided guidance and feedback include Clemente
Adaptations for private-sector led infrastructure development in Africa
T20 Policy Brief, TF3: Infrastructure Investment and Financing , 2020
While Africa faces a huge infrastructure gap, there are measures that Group of 20 (G20) countries and its institutions can take to ensure greater and faster infrastructure investments. G20 institutions, particularly development finance institutions (DFIs), should undertake enhanced local approaches to blended finance. Likewise, G20 governments and associated institutions should rapidly address options for reducing project cycle timelines and complexity. They should also intensify efforts to mitigate fiscal risks in public-private partnerships to make projects more bankable, and address off-budget or opaque contingent liabilities. These actions will lead to more productive infrastructure investment, thereby leading to improvements in connectivity and quality of life for communities across Africa. T20 Policy Brief, TF3: Infrastructure Investment and Financing https://t20saudiarabia.org.sa/en/briefs/Pages/Policy-Brief.aspx?pb=TF3\_PB2