Africa: The Infrastructure Gap
Public-private partnerships, trade and investment, along with official development aid are key instruments for closing Sub-Saharan Africa’s infrastructure gap.
The economic case for investing in infrastructure projects is strong, but the political case is, at times, not strong enough. Perhaps because, as they say, politics trumps economics. But things and times are changing (think of China’s one belt, one road initiative, a hugely important infrastructure ingenuity that is poised to physically connect Asia, Africa and Europe by road and rail).
In “Taking the Politics Out of Development,” Keyu Jin of the London School of Economics, aptly notes the importance of China’s one belt, one road initiative (OBOR): “efficient infrastructure enhances productivity, fosters investment, and lowers the costs of trade.” Professor Jin goes on to write that “With effective channels for the exchange of goods and well-connected information networks, growth accelerates, economic opportunity increases, and inequality narrows.”
Unfortunately, Africa, most especially Sub-Saharan Africa, is lagging behind the rest of the world in terms of infrastructure quantity, quality and access, according to a new report by Africa’s Pulse, a World Bank biannual analysis of the state of African economies.
Two examples are indicative of the scale and magnitude of Sub-Saharan Africa’s infrastructure gap: Liberia (my own) has about 6,000km of road network, of which less than 16 per cent (1,000km) is asphalted. In South Sudan, the world’s youngest country, David Shearer, the head of the United Nations Mission in South Sudan (UNMISS) puts the country infrastructure challenge best in a recent BBC Hardtalk interview: “There is 200km of tarmac road in South Sudan - 200km in a country the size of France.”
Despite Sub-Saharan Africa’s (SSA) wide infrastructure gap, low road and railway densities and electricity access, telecommunications access has “improved dramatically: the number of fixed and mobile phone lines per 1,000 people increased from three in 1990 to 736 in 2014, and the number of Internet users per 100 people increased from 1.3 in 2005 to 16.7 in 2015,″ according to the report. Moreover, innovative solutions (such as the U.S. government Millennium Challenge Corporation part-financing of the rehabilitation of Liberia’s Mt. Coffee Hydro and, now, China’s one belt, one road initiative including the recently dedicated $3.8bn Mombassa-Nairobi standard gauge railway in Kenya) to closing the infrastructure gap are taking place on the continent.
Going Beyond Aid, an important new book by Justin Lin and Yan Wang, is at the crux of financing infrastructure development projects such as the MCC and the OBOR initiative in SSA. But to attract these massive infrastructure projects, Sub-Saharan Africa, as the report points out, would need “robust institutional and regulatory framework,” a surmountable challenge a la strong political will and leadership.
Nonetheless, the growth benefits of closing Sub-Saharan Africa’s infrastructure quantity and quality gap, the Africa’s Pulse report notes, are “potentially large:”
Catching up to the median of the rest of the developing world would increase growth in GDP per capita by 1.7 percentage points per year, and closing the gap relative to the best performers would lift this growth by 2.6 percentage points per year. Closing the gap in electricity–generating capacity yields the largest potential benefit, and substantial gains also arise from narrowing the gap in the length of the road network.
Let’s get to work Sub-Saharan Africa by increasing public spending on both hard and soft infrastructure projects, but, perhaps most important, by harnessing the power of the market via creative and innovative financing mechanisms such as PPPs and OBOR-style initiative, a sure path to sustainable peace and prosperity(?).
(P.S.–The last in this series of blog posts on Africa will look at governance a la electoral democracy on the continent.)
