Finance is not the main constraint, despite the current focus on financing infrastructure development in recent summits and discussions around the new sustainable development goals (SDGs), I discuss in this blog.
Rather it is the effectiveness of finance and viable infrastructure projects to invest in. ‘Closing Africa’s infrastructure financing gap will not only involve raising additional funds but also improving the efficiency with which existing resources are used’, the World Bank states.
Poor African Infrastructure Status Puts Development at Stake
Africa’s infrastructure lags behind requirements, and the financial funding gap cannot be underestimated: only 38% of the African population has electricity access, less than 10% internet penetration rate, only 25% of Africa’s roads are paved, and poor port facilities add 30-40% to intra-African trading costs deteriorating the inflow of FDI. This results in expensive infrastructure services, constrained industrial productivity, limited participation in global trade and limited production competitiveness. There is therefore a risk that poor infrastructure facilities undermine the recently improved economic growth performances across Africa. Clearly then there is a need for increased financial means to modernise existing and develop new infrastructure.
Infrastructure – A Real Heavy Weight
Infrastructure is key in several different development debates. On promoting structural transformation, post-2015 development goals, maximising the benefits from extractives and promoting food security, as the following events demonstrate:
Infrastructure is vital for supply, and regional food value chains. Roads, ports and railways are key to developing and exploiting linkages between economic transformation, natural resources and agriculture. The aim is to achieve inclusive growth, to foster intra-African trade and continued regional integration. The current favourable economic landscape is opportune to address the infrastructure deficit by financing both national and regional priority projects by means of the increasing ability and need to mobilise domestic resources and attract more private finance.
But it is not all about finance. Neither is it all about the mobilisation of new resources. Rather addressing the infrastructure gaps requires a combination of a conducive enabling environment, effective institutions and actors (public and private), and yes, also sufficient financial means.
Three Foundations for Sustainable Infrastructure Development
Quality matters most, so it may be helpful to think about this in terms of three pillars:
The Way Forward
Even if you get all of the above right and finance is available, an enabling environment in place and strong institutions present – political commitment ultimately depends on political incentives to prioritise a certain type of investment or project over another.
What are these incentives? What are the incentives to strengthen institutions? And given Africa’s priorities, getting sufficient political momentum and effective institutional mechanisms at the regional level to finance cross-border infrastructures remains a major challenge.
This should really be the focus within discussions around financing the new SDGs, since success of the post-2015 development agenda will ultimately depend on political incentives to successfully finance and implement (infrastructure) projects and/or strategies.
The views expressed here are those of the author, and may not necessarily represent those of ECDPM.
Picture: Hassan II bridge by night – Safia Osman.
I don't think this way of looking at infrastructure really helps. Basically infrastructure has hardware and softward. Most disucssions and funding proposals only look at the hardware. The software is the intellectual component, which includes ability to maintain, repair, keep it ticking over, expandin if necessary and requires a personel and and educational or training plan. New inventions and new ways of using old inventions are also part of infrastructure such as solar panels, solar water heating, rainwater harvesting These are cheap but will never happen without the innovators. why also is knowledge infrastruture itself always forgotten about, such as libraries and Post Offices. Many countries have failed to get these because there is a strange beleive that the internet and mobile phones will replace them, another wrong assumption based on the fanciful notiion that phone systems are both hardware and software and that the Internet doesn't need anyone to show people how to use it or to find what they want on it, this is just the science of Information Management, or as it used to be called 'librarianship/. Countries with a good iibrary system have found that it is one of the most useful ways of getting peope excited about education and learning. And now that so many peope are buying things on the internet using parcel post countries without Post Offices (or those who privatized their Post Offices) are suffering.