Africa's Infrastructure
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Overview Africa’s Infrastructure: A Time for Transformation he Africa Infrastructure Country Diag- dis economies of scale in production and nostic is an unprecedented attempt to high profit margins caused by lack of T collect comprehensive data on the infra- competition. structure sectors in Africa—covering power, • Power is by far Africa’s largest infrastructure transport, irrigation, water and sanitation, and challenge, with 30 countries facing regular information and communication technology power shortages and many paying high pre- (ICT)—and to provide an integrated analysis miums for emergency power. of the challenges they face. Based on extensive • The cost of addressing Africa’s infrastruc- fi eldwork across Africa, the following main ture needs is around $93 billion a year, about fi ndings have emerged: one-third of which is for maintenance— • Infrastructure has been responsible for more than twice the Commission for Afri- more than half of Africa’s recent improved ca’s (2005) estimate. growth performance and has the potential • The infrastructure challenge varies greatly to contribute even more in the future. by country type—fragile states face an • Africa’s infrastructure networks increas- impossible burden and resource-rich coun- ingly lag behind those of other developing tries lag despite their wealth. countries and are characterized by miss- • A large share of Africa’s infrastructure is ing regional links and stagnant household domestically fi nanced, with the central gov- access. ernment budget being the main driver of • Africa’s diffi cult economic geography pre- infrastructure investment. sents a particular challenge for the region’s • Even if major potential effi ciency gains are infrastructure development. captured, Africa would still face an infra- • Africa’s infrastructure services are twice structure funding gap of $31 billion a year, as expensive as elsewhere, refl ecting both mainly in power. 1 2 AFRICA’S INFRASTRUCTURE: A TIME FOR TRANSFORMATION • Africa’s institutional, regulatory, and admin- For most countries, the negative effect of defi - istrative reforms are only halfway along, cient infrastructure is at least as large as that but they are already proving their effect on of crime, red tape, corruption, and fi nancial operational effi ciency. market constraints. For one set of countries, power emerges as the most limiting factor by far, cited by more than half the fi rms in more Finding 1: Infrastructure than half the countries as a major business Contributed over Half of Africa’s obstacle. For a second set, ineffi cient function- Improved Growth Performance ing of ports and associated customs clearance is equally signifi cant. Defi ciencies in transport Africa’s growth improved markedly in the last and in ICTs are less prevalent but substantial decade. African countries saw their econo- in some cases. mies grow at a solid 4 percent a year from Infrastructure not only contributes to eco- 2001 to 2005. Resource-rich countries, which nomic growth, but it is also an important input have benefi ted from rising commodity prices, to human development (Fay and others 2005). demonstrate the highest growth rates. Growth Infrastructure is a key ingredient for achieving overall still falls short of the 7 percent needed all the MDGs. Safe and convenient water sup- to achieve substantial poverty reduction and plies save time and arrest the spread of a range attain the Millennium Development Goals of serious diseases—including diarrhea, a lead- (MDGs), however. Infrastructure, signifi cant ing cause of infant mortality and malnutrition. in Africa’s economic turnaround, will need to Electricity powers health and education services play an even greater role for the continent to and boosts the productivity of small businesses. reach its development targets. Road networks provide links to global and local Across Africa, infrastructure contributed markets. ICTs democratize access to informa- 99 basis points to per capita economic growth tion and reduce transport costs by allowing from 1990 to 2005, compared with 68 basis people to conduct transactions remotely. points for other structural policies (Calderón 2008). That contribution is almost entirely attributable to advances in the penetration Finding 2: Africa’s Infrastructure of telecommunication services. The deterio- Lags Well behind That of Other ration in the quantity and quality of power Developing Countries infrastructure over the same period retarded growth, shaving 11 basis points from per cap- On just about every measure of infrastructure ita growth for Africa as a whole and as much as coverage, African countries lag behind their 20 basis points for southern Africa. peers in the developing world (Yepes, Pierce, The growth effects of further improving and Foster 2008). This lag is perceptible for low- Africa’s infrastructure would be even greater. and middle-income countries in Sub-Saharan Simulations suggest that if all African coun- Africa relative to other low- and middle-income tries were to catch up with Mauritius (the countries (table O.1). The differences are par- regional leader in infrastructure) per capita ticularly large for paved roads, telephone main growth in the region could increase by 2.2 per- lines, and power generation. For all three, Africa centage points. Catching up with the Republic has been expanding stocks much more slowly of Korea would increase per capita growth by than other developing regions; so unless some- 2.6 percentage points a year. In Côte d’Ivoire, thing changes, the gap will continue to widen. the Democratic Republic of Congo, and Sen- To what extent does Africa’s current defi cit egal, the effect would be even larger. date to a low starting point for infrastructure In most African countries, particularly stocks? Africa started out with stocks that the lower-income countries, infrastructure were generally not very different from those emerges as a major constraint on doing busi- in South or East Asia in the 1960s for roads, ness, depressing fi rm productivity by about in the 1970s for telephones, and in the 1980s 40 percent (Escribano, Guasch, and Pena 2008). for power. The comparison with South Asia, Africa’s Infrastructure: A Time for Transformation 3 which has similar per capita incomes, is par- universal access to these and other household ticularly striking. In 1970, Sub-Saharan Africa services is more than 50 years away in most had almost three times the generating capac- African countries (Banerjee, Wodon, and oth- ity per million people as South Asia. In 2000, ers 2008). Even where infrastructure networks South Asia had left Sub-Saharan Africa far are in place, a signifi cant percentage of house- behind—with almost twice the generation holds remains unconnected, suggesting that capacity per million people. Also in 1970, demand-side barriers exist and that univer- Sub-Saharan Africa had twice the main-line sal access entails more than physical rollouts telephone density of South Asia, but by 2000, of networks. As might be expected, access to the two regions were even. infrastructure in rural areas is only a frac- Since 1990, coverage of household services tion of that in urban areas, even where urban has barely improved (fi gure O.1, panel a). coverage is already low by international stan- Africa is unlikely to meet the MDGs for water dards (Banerjee, Wodon, and others 2008) and sanitation. Moreover, on current trends, (fi gure O.1, panel b). Table O.1 Africa’s Infrastructure Deficit Sub-Saharan Finding 3: Africa’s Difficult Africa Other low-income low-income Economic Geography Presents a Normalized units countries countries Challenge for Infrastructure Paved-road density 31 134 Development Total road density 137 211 Main-line density 10 78 Relative to other continents, Africa is char- Mobile density 55 76 acterized by low overall population density Internet density 2 3 (36 people per square kilometer), low rates of urbanization (35 percent), but relatively rapid Generation capacity 37 326 rates of urban growth (3.6 percent a year), a Electricity coverage 16 41 relatively large number of landlocked coun- Improved water 60 72 tries (15), and numerous small economies. Improved sanitation 34 51 A further complication is that the continent Source: Yepes, Pierce, and Foster 2008. experiences particularly high hydrological Note: Road density is measured in kilometers per 100 square kilometers of arable land; telephone density in lines per thousand variability, with huge swings in precipitation population; generation capacity in megawatts per million popula- across areas, seasons, and time, which climate tion; electricity, water, and sanitation coverage in percentage of population. change is likely to exacerbate. Figure O.1 Access to Household Services a. Stagnant trends b. Rural-urban divide 40 80 30 60 20 40 % of population 10 % of population 20 0 0 1990–95 1996–2000 2001–05 piped water electricity flush toilets landline telephones piped water electricity national rural urban flush toilets landline telephones Source: Banerjee, Wodon, and others 2008. 4 AFRICA’S INFRASTRUCTURE: A TIME FOR TRANSFORMATION Africa’s atomized nation-states are refl ected Africa’s water resources are abundant, in the region’s fragmentary infrastructure but because of an absence of water stor- networks. Sub-Saharan Africa comprises 48 age and distribution infrastructure, they are nation-states, many of which are very small. grossly underused. Therefore, water security— The bulk of those countries have populations eliable water supplies and acceptable risks of fewer than 20 million and economies smaller from fl oods and other unpredictable events, than $10 billion. International frontiers bear including those from climate change—will little relation either to natural features (such require a significant expansion of water as river basins) or to artifi cial features (such as storage capacity from the current 200 cubic cities and their accessibility to trading chan- meters per capita (Grey and Sadoff 2006). In nels, such as ports). Intraregional connectiv- other parts of the world, such capacity is in ity is therefore very low, whether measured in the thousands of cubic meters.