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Home , Infrastructure in Africa

The African Development Bank Group Chief Economist Complex

Economic Brief Infrastructure Deficit and Opportunities in Volume1, Issue September, 2010

1. Introduction

There are huge investment The good news is governments have Contents: opportunities in Africa, especially in started exploring opportunities for 1. Introduction infrastructure, where the benefits are tapping into private financing, creating expected to be high. In particular, new partnerships and reducing wastage Africa’s absolute and relative lack of in such investments. This strategic shift 2. The State of infrastructure points to the existence has come about on the realization that Infrastructure Supply in of untapped productive potential, scaling up financing from traditional Africa which could be unlocked through sources alone would not be adequate to scaling up investments in the sector. close the infrastructure gap. Also, there Notably, infrastructure plays a central is evidence that those countries that role in improving competitiveness, have invested strategically in 3. Africa’s Infrastructure facilitating domestic and international infrastructure are reaping the benefits2. Financing trade, and enhancing the ’s It is therefore crucial to open Requirements integration into the global economy. opportunities to attract new investors as Coupled with better human well as exploring new mechanisms for development outcomes that improved financing infrastructure in Africa. 4. Mobilizing Financing infrastructure promises, the spillover It is in this context that this brief for Infrastructure in effects and the dynamism that would attempts to assess Africa’s Africa be generated could support the infrastructure gaps and financing continent’s economic growth and requirements to close such gaps. It also 5. The Role of the AfDB poverty reduction efforts. Similarly, identifies financing sources and in Infrastructure improved infrastructure could help suggests new sources and financing Development eliminate some of the binding instruments. This is followed by a brief constraints to the realization of the narrative of the Bank’s role in 6. Conclusions benefits of globalization. infrastructure. In concluding, the main message is that efforts by African The estimated financing requirement governments to close the gaps present to close Africa’s infrastructure deficit huge investment opportunities to all amounts to USD 93 billion annually types of investors, especially the private until 20201. In as much as this sector. financing requirement is a challenge,

Mthuli Ncube African governments have a wide [email protected] range of policy options that could +216 7110 2062 open new sources of finance.

Charles Leyeka Lufumpa [email protected] +216 7110 2175 Prepared by the following staff: Albert Mafusire (a.mafusire @afdb.org, Tel +216 7110 2521)

Leonce Ndikumana ;John Anyanwu ([email protected], Tel +216 7110 2225);Zuzana Brixiova [email protected] ([email protected], Tel +216 7110 2335); and Maurice Mubila ([email protected], Tel +216 +216 7110 2076 7110 3653)

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2. The State of Infrastructure 2.1 Where do the Supply in Africa Opportunities Lie?

Infrastructure investments in Africa Electricity – In 2008, only 38% of “The continent’s, road have not kept pace with growth in Africans had access to electricity freight is about 4 times demand, creating a huge deficit. Less compared to an average of 68% for all more expensive, power than 40% of the continent’s developing countries, 53% for South costs 14 US cents per population has access to electricity, and 80-90% for Latin America. kilowatt-hour against 5 about a third of the rural population The figure is even lower for Sub- – 10 US cents and has access to roads and only 5% of Saharan Africa (SSA), currently at mobile telephony costs agriculture is under irrigation. The 26%. Furthermore, about 30 African USD 12 per month situation is no better for social countries endured on average 11.5 infrastructure, with only 34% of the power outages in 2007. The power compared to USD 8 population having access to improved outages were due largely to lack of elsewhere.” sanitation and a slightly better regional interconnectivity of the situation for clean water at about 65%. electricity grids and shortages in On the other hand, the Information affected countries (Annex 1b). During and Communications Technology this period, regional surpluses in (ICT) sub-sector is characterized by generation capacity were noted for all huge differences across specific the five sub-regions except for East services. In 2008, four out of ten Africa, which had intermittent Africans had access to mobile phones, shortages (Figure 1). Some of the with penetration rates growing fastest surplus countries like compared to the rest of the world. now have deficits due to increases in However, density is just demand. The costs of power outages above 80 persons per thousand (less are significant, with Africa loosing than one in ten), while the figure for almost 12.5% of production time fixed telephones are even lower. compared to 7% for South Asia, which the next worst case (Figure 2). Furthermore, Africa faces higher Therefore potential productivity gains access costs compared to other from electricity supply, together with developing countries. The continent’s, the associated income effect point to a road freight is about 4 times more market with significant growth expensive, power costs 14 US cents potential. per kilowatt-hour against 5 – 10 US cents and mobile telephony costs USD Indeed the emergence of independent 12 per month compared to USD 8 power producers (IPPs) signals elsewhere. There is no doubt that the sweeping changes in the power sector. African market is still underserved For instance, the National Energy and the returns to investors are high. Regulator of South Africa has Investors that have gone into the established a regulatory environment "In , nearly telecommunications and finance sub- that would allow upward adjustments two-thirds of electricity sectors, following improved in tariffs and thus improve the production is by private regulatory conditions have realized viability of private sector suppliers. In Morocco, nearly two-thirds of producers.” higher returns compared to any other region in the world. UNCTAD electricity production is by private reported that since 1990, the rate of producers, the Jorf Lasfar Energy return on foreign direct investment Company - presently Africa's largest (FDI) in Africa has averaged 29%, IPP, Compagnie Eolienne de Detroit and since 1991 it has been higher than (CED) and Energie Electrique de in all other regions, in many years by Tahaddart (EET). a factor of two.3

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4 More importantly, the majority of and cheaper forms of energy. These project financing for these companies developments clearly show opportunities was sourced from local Moroccan banks for private suppliers, in a sector that is and the sector is now diversifying into characterized by shortages. “Having realized the clean energy and other more efficient inadequacy of public Figure 1: Electricity Balance in Africa; million kilowatt-hours (-deficit; + surplus) funds in developing road infrastructure Africa is moving quickly into toll road.”

Source: AfDB Statistics

Figure 2: Working hours lost due to power outages, 2009

Source: AICD, 2009 “Between 1990 and 1999 Africa’s private Transport Infrastructure – Roads – from 0.5 km per thousand of persons in SSA’s total road network is only 204 to 35.5 km in . Having investments in roads km per 1,000 km2 of land area, of realized the inadequacy of public funds was only USD1.4 which only about 25% is paved, in developing road infrastructure Africa billion, these compared to the world average of 944 is moving quickly into toll roads. While investments increased by km per 1000 km2 of land area. This Africa was a late starter, it has more than USD 21 translates into 3.6 km of road per 1,000 increased private sector participation in billion between 2000 persons for the region, relative to a roads. Between 1990 and 1999 Africa’s and 2005.” world average of about 7 km per 1000 private investments in roads was only persons. Behind these numbers USD1.4 billion, these investments however lie huge intra-African increased by more than USD 21 billion disparities (regional and trans-African between 2000 and 2005.1 The USD 385 links are missing, see Annex 1a), with million Lekki-Epe toll road in Lagos is the availability of rural roads ranging a recent example.

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Such investments are expected to be Ports – Whereas Africa operates 64 even bigger in the near future, given ports, huge problems remain with the existing gaps in major road links. respect to capacity and performance of For example, the Highway in existing facilities as well as handling is expected to cost USD costs. Over-the-quay container- “The challenge with 11.5 billion over a ten-year period to handling performance is below 20 regards to transport 2018. moves/hour, compared to 25–30 in infrastructure is not modern terminals around the world. In only limited to the Rail – Rail networks are the least addition, handling costs average 50% physical deficit but also developed in Africa, with very little more than in other parts of the world. lack of linkages additions to the systems developed in With about half of the coastal countries between roads and rail the colonial period. The 1067km long operating port facilities introducing lines, and poor Tazara rail line developed in the 1970s sectoral legislation and regulatory connectivity to ports.” is a notable exception. Since the 1990s, reforms, new investment opportunities the lengths of rails have remained will come onboard. Currently, private unchanged in many countries. In 2007, investments in ports are low yet there is Africa has 69 000 km of which 55 000 a great need for transshipment facilities. km is operational, most of it in Four regional hubs exist and these Southern and Northern Africa. Thirteen include Durban in , SSA countries have no operational rail Mombasa and Dar-es-Salaam in East networks, while spatial density of Africa, with also emerging as operational rail ranges from 1 to 6. The a new hub. In , Abidjan network density for most African used to play this role but has since lost countries range from 30 to 50 per it to ’s Malaga due to civil war. million people with a few countries (, and South Africa) The challenge with regards to transport having network densities of more than infrastructure is not only limited to the 400. These network densities are very physical deficit but also lack of low compared to ’s range of linkages between roads and rail lines, 200 to 1000. It is also notable that and poor connectivity to ports. This has African exports are largely bulky resulted in Africa being the world’s primary commodities that can be worst rated region in the Logistics moved more efficiently and at lower Performance Index (LPI) in 2009, even costs through rail than road transport. though the picture varies considerably Rail development therefore holds some across countries. As Africa looks at opportunities for investors. scaling infrastructure investments in the Investments in associated activities like transport sector, the trade impact of locomotive building, logistics, and such investments will spur growth and communications also exist. development.

Table 1: ITU ICT Development Index (IDI): 2008 top five per region “Rail networks are the least developed in Africa, IDI IDI IDI IDI Europe Arab States CIS Africa with very little additions to rank rank rank rank the systems developed in Sweden 1 UAE 29 Russia 48 66 the colonial period. The Luxembou 2 Bahrain 33 Belarus 55 72 1067km long Tazara rail rg line developed in the 1970s South Denmark 4 Qatar 45 Ukrania 58 92 is a notable exception.” Africa Netherlan Cape 5 Saudi Arabia 52 Kazakhstan 69 102 ds Verde Iceland 6 Kuwait 65 Moldova 73 Botswana 109 Source: ITU, 2009

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This in turn will have spillover effects However, D.R. Congo and are in all other sectors that open further far from meeting the MDG target for opportunities for private sector clean water. investments. Within the transport sub- ICT – Access to fixed-line telephones sector, investors have great is below 3% in SSA, compared to 19% opportunities in developing systems “Only 65% of Africans in Latin America and the Caribbean, that improve intermodal efficiency. have access to clean and 16% in the and North water compared to 87% Water and Sanitation – Only 65% of Africa. Mobile phone access in Africa for East Asia and Africans have access to clean water (40%) is better than South Asia (33%) Pacific, and 91% for compared to 87% for East Asia and but trails East Asia and the Pacific Latin America and the Pacific, and 91% for Latin America (53%) and Latin America and the Caribbean.” and the Caribbean. Significant progress Caribbean (80%). has been made in this respect, with five countries (, ,

Malawi, Namibia and South Africa) having met the MDG target as of 2006 and another 12 on course to meet the target by 2015. Figure 3: Regional Internet Users per 1000 Persons

Source: AfDB Statistics and ITU Online data A similar situation holds for internet infrastructure development is still usage at the continental level, though lower than other low-income regions North Africa is way ahead of all other (Figure 4). In particular, the energy

African sub-regions (Figure sub-sector has the largest comparative “Sectoral regulatory reforms, however, have 3).However, the ICT sector has seen deficit while total road density and opened opportunities increased investments in recent years, access to clean water compare for private sector estimated at about USD 21 billion in relatively well, though still lagging. two years from 2007. Expectations are For ICT, even the top five African investors as well as the th th donor community; as that ICT investments could top USD 70 countries are only ranked 66 to 109

such reforms have billion by 2012.1 The International on a global scale (Table 1). Sectoral Telecommunications Union (ITU) also regulatory reforms, however, have improved the business environment…” notes that 45 countries have opened opportunities for private sector implemented appropriate regulatory investors as well as the donor

frameworks that are supportive of community; as such reforms have

private investment. improved the business environment and enhanced efficiency in Despite some notable achievements in implementing and managing recent years, Africa’s level of infrastructure investments.

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2.2 International Infrastructure For power generation, the figures are Comparison Based on Income Levels no better, with African LICs being 8 times worse-off (39 MW per million A comparison with other developing people compared to 326 MW) and “In spite of the higher countries on the basis of income levels total road density on the MICs 3 times worse-off compared to reveals a more severe picture of their counterparts elsewhere. For continent however, most Africa’s infrastructure deficit (Figure internet access, the situation is the of them are in a poor 3). Except for the higher road density in state and remain reverse, with African MICs almost 30 Africa, all other infrastructure indicators times worse-off compared to their unusable.” show the continent lagging. In spite of peers elsewhere and LICs only 14 the higher total road density on the times. Overall disparities in continent however, most of them are in infrastructure development are more a poor state and remain unusable. pronounced for paved roads, fixed Africa’s position compared to other telephones, and internet access and regions is only encouraging in the power generation. supply of clean water and sanitation facilities. While the huge initial capital outlays

requirements go along a way in Africa’s infrastructure deficit is more explaining these differences in acute among its low-incomes countries infrastructure services, this is (LICs) compared to middle-income compounded by the extent of ones (MICs). In this context, African regulatory constraints in some of the LICs are for example 4 times worse off countries, all of which impact on the compared to LICs from elsewhere in level of risk faced by investors. Yet we terms of paved-road density, while acknowledge the significant changes African MICs are less than twice as that are taking place across Africa, worse-off relative to their peers in other including in LICs and Post-conflict regions. countries. For example, was ranked as the best reformer in the 2010 Doing Business report. Figure 4: International Comparisons of Infrastructure Supply Conditions

“Rural-urban migration, which accounts for

about half of the

urbanization rate, has take place in spite of Source: Based on AICD (2009) data capacity constraints for local urban authorities 2.3 Rural-urban Divide to investment in Rural-urban migration, which accounts infrastructure.” There is a wide rural-urban divide in for about half of the urbanization rate, infrastructure supply which is partly has take place in spite of capacity explained by rapid urbanization (about constraints for local urban authorities 4%) that Africa has been experiencing to investment in infrastructure. in recent years (Figure 5).

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Figure 5: International Infrastructure Rural-urban Divide7

“With about 65% of Africa’s population living in rural areas, governments will need to invest more in rural

infrastructure to ensure shared growth.”

With about 65% of Africa’s population Improvements in the urban environment living in rural areas, governments will would positively impact investment need to invest more in rural flows and the potential for cities to infrastructure to ensure shared growth. generate the necessary economic

This is because private sector dynamism that supports growth. investments will be extremely limited due to commercial viability problems 3. Africa’s Infrastructure especially in sparsely populated areas. Financing Requirements Again, African cities are ranked at the bottom of developing cities worldwide Infrastructure financing requirements in 8 Africa’s MICs are estimated at about with regards to urban infrastructure. 9 Intra-African differences are also large, 10% of GDP per year until 2020. with Dakar having more than 1,500 While in absolute terms LICs will meters of paved road per thousand require a less amount than MICs, their

inhabitants, which is about four times investment needs are even higher, at about 15% of GDP per year. This higher than the next best case (Lagos). At the other extreme, Kinshasa has just implies overall investments of 63 meters of paved road per thousand between USD 93 billion per year inhabitants, barely half that of the next over the next decade, depending on worst city (Dar-Es-Salaam). the realized level of GDP growth. This estimate is well above that of The quality and access to basic services the United Nations (USD 52 billion) in urban areas are both poor. Yet urban in 200810, about 75% of which is to centers present the greatest opportunity go to MICs. The required for infrastructure development due to

the high population densities. The UN- investments in infrastructure are therefore about twice the current Habitat recommends that building standards in urban areas would need to level that has been realized to date. “It is almost certain be reviewed to take into account income It is almost certain that it will be that it will be differentials if affordable housing is to impossible to scale up investments impossible to scale up be provided by the private sector. In this from current financing sources alone investments from context, urban development by-laws are if the demand is to be met. New

current financing being revamped in concert with sources of financing have to be sources alone if the regulatory reforms at the national identified and developed while at the levels. This will allow greater private demand is to be met.” same time making greater efforts to sector investments in the housing and maximize the potential of existing the commercial property sector, infrastructure financing mechanisms. including the associated social infrastructure and conservation of the environment.

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Though daunting, this challenge is not However, although the share of aid in insurmountable. Indeed, private infrastructure has increased (e.g. from investors and the donor community have 8% in 2006 to 18% in 2008, see Figure increased financing for infrastructure 6) it has been less consistent and “...private investors and projects in recent years, a trend that unpredictable; yet there is high the donor community continued even through the recent global dependency on aid in some countries have increased financing financial and economic crisis. In this (Annex 2). It is also noteworthy that for infrastructure context, infrastructure financing in Africa currently meets about two thirds projects in recent years, a Africa rose to about USD 42 billion in of its infrastructure spending from

trend that continued even 2007 from USD 40 billion in 2006. domestic sources. In addition, the through the recent global Despite the impact of the global improved policy and business financial and economic economic downturn, investments by the environment is attracting increasing crisis.” Infrastructure Consortium for Africa levels of private sector participation (ICA) members alone went up by 45%, through public-private partnerships from about USD 14 billion in 2008 to (PPPs). almost USD 20 billion in 2009.11

Figure 6: Aid Dependency and Aid Allocations to Infrastructure

4. Mobilizing Financing for MICs have better prospects in securing Infrastructure in Africa such amounts of financing compared to LICs due to the latter’s low levels of

Public infrastructure financing across financial market development, capacity Africa falls far short of its infrastructure constraints and perceptions of high risk 14 needs and aid alone cannot close this that limit private sector participation. gap. In fact, in several African LICs, However both categories of countries official aid is not projected to increase in must pay particular attention to the line with public investment spending.12 regulatory environment. Africa’s “...in several African Therefore financing options for closing infrastructure sector is still dominated by LICs, official aid is not Africa’s infrastructure gaps should focus monopolistic incumbents who resist

projected to increase in on broadening the sources of finance and against market reforms. While progress line with public has been made in this regard, more still a better allocation of public resources investment spending.” (both domestic and donor funds). This is has to be done. For instance, in South particularly important given the capital Africa entry is still regarded as highly intensity of infrastructure projects. In restricted in telecommunications, rail Nigeria, for instance, a ball-park freight and electricity sub-sectors estimation of the amount of investment compared to OECD countries. required to expand energy generation Continent-wide 20 out of 26 countries capacity from 10 000 MW to 30 000 score less than 5 from a possible MW is between USD 25 and USD 30 maximum of 10 on the services market billion.13 liberalization index. 15

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In this context, greater efforts in For instance, Chinese investments have identifying alternative and innovative increased markedly in recent years, financing mechanisms for infrastructure rising from only USD 1 billion in 2001 should be directed towards enhancing to about USD 7.5 billion in 2006.A “South-South FDI private sector participation. Such efforts total of 35 African countries have investment flows into will have to be complemented with particularly benefited, with about 16% Africa are estimated at greater efficiency in the allocation of of the resources flowing into more than USD 60 public resources. infrastructure. Average allocations of billion since 2003.” these flows over the 2001 - 2007 period a. Mobilizing foreign private capital show that the electricity and transport flows to co-finance infrastructure sub-sectors have benefited most (Figure South-South partnerships in 7 & 8). It is also noted that the largest infrastructure financing are gaining recipients of Chinese FDI into traction, with developing economies’ infrastructure in Africa are Nigeria, share in Africa’s annual FDI inflows , and . China has having increased from around 17.7% in also invested in the transport sub-sector 1999 to around 21% in 2008. South- in Nigeria, Gabon and . South FDI investment flows into Africa are estimated at more than USD 60

billion since 2003.16

Figure 7: Chinese Investments by Country, 2001 - 2007

Others Others 28% Nigeria 28% Nigeria 34% 34%

Sudan Sudan 8% 8% Ethiopia Angola Ethiopia Angola

10% 20% 10% 20%

Figure 8: Chinese investments by Sector, 2001 - 2007

Source: World Bank-PPIAF Database, 2009

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b. Alternative domestic and regional earnings and minimize the risk of debt private sources of financing distress when commodity prices fall.

infrastructure

ƒ Infrastructure bonds: for example, successfully issued domestic 5. The Role of the AfDB in “Increased focus by the infrastructure bonds, raising almost Infrastructure Development African Development KSH 30 billion (USD 370 million). Increased focus by the African Bank is aimed at However, financial markets are small catalyzing and Development Bank is aimed at in some of Africa’s economies such catalyzing and leveraging larger leveraging larger that a regional approach to raising resources flows, resources flows, promotion of regional financing through similar instruments promotion of regional infrastructure connectivity, narrowing would be required. the development gaps among African infrastructure connectivity, narrowing economies, promoting efficient use of ƒ Sovereign Wealth Funds (SWF) are regional infrastructure and reducing the the development gaps another important source of investment costs to users, and addressing country among African funds, with the Libyan Arab African specific infrastructure capacity economies, promoting Investment Company (for instance) constraints. efficient use of regional making investments worth USD 800 infrastructure and million in 13 African countries in 2008 5.1 Infrastructure Financing reducing the costs to alone.17 users, and addressing by the Bank

country specific c. Commodity-linked bonds infrastructure capacity In line with the Bank’s 2008-2012 medium term strategy, infrastructure constraints.” Commodity-linked bonds are yet to be financing alone accounts for more than explored in Africa. With some of the half of Bank operations. More than continent’s export commodities being USD6 billion in 2009 out of total traded on the futures market, there are operations worth USD12.6 billion was possibilities to issue commodity-linked invested in infrastructure of all types bonds whose proceeds could be used to presently, accounting for 52% of the boost infrastructure investments. If Bank’s portfolio. The energy sub-sector LDCs had issued debt contracts that received the largest share of 57% were tied to their main export (Figure 9). This was mainly in response commodities, then their debt burden to power outages and the energy would decline along with plummeting shortage in many countries. The overall export prices18. Such commodity-linked approval for infrastructure in 2009 bonds can therefore help hedge against represents an increase of 177.3% fluctuations in commodity export 19 compared to 2008 . Figure 9: Sectoral Distribution of AfDB Approvals for Infrastructure, 2009

Source: World Bank-PPIAF Database, 2009

Infrastructure Deficit and Opportunities in Africa Page 11

African leaders’ aspirations, as With this focus, this partnership seeks expressed in the creation of the New to reduce wastage through improved Economic Partnership for Africa’s efficiency and environment friendly Development (NEPAD) in 2001, are development. “African leaders’ supportive of strong partnerships with

aspirations, as global and regional institutions. In this Improvements in physical infrastructure

expressed in the context, the Bank has been involved in have been complemented with “soft” creation of the New the NEPAD Short-Term Action Plan infrastructure development, through Economic Partnership (STAP), the NEPAD Medium-to-Long- capacity building and partnerships; for Africa’s Term Strategic Framework (MLTSF), harmonization of legislation, Development (NEPAD) the Infrastructure Master regulations, and technical standards; as in 2001, are supportive Plan Initiative, and the Program for well as trade facilitation activities in of strong partnerships Infrastructure Development in Africa collaboration with national and regional with global and (PIDA) that was launched in July 2010. agencies to drive regional integration regional institutions.” on the continent. Other initiatives targeting the infrastructure sector include the NEPAD Infrastructure Project Preparation Fund 6. Conclusions (IPPF) 20, Infrastructure Consortium for Private sector investment opportunities Africa (ICA) and the EU-Africa in Africa’s infrastructure are huge and Partnership on Infrastructure. At the end work to identify the projects is of May 2010 IPPF had an active underway. Regulatory reforms in both portfolio of 41 projects (53 in the LICs and MICs have also been pipeline until 2015) and has initiated identified as critical to the realization of regional infrastructure projects worth the expected investment flows. around USD 4.7 billion, representing a

huge leveraging potential.21 It has been clearly noted there are An Africa Action Plan priority projects infrastructure deficiencies in all sub- list, worth about USD 32 billion, has sectors, with LICs facing the greatest also been drawn (Figure 9). Main target challenge. Inefficiencies in projects on this list reflect the magnitude implementing infrastructure projects of infrastructure gaps as discussed account for USD 17 billion annually earlier, with energy being the dominant and improving the capacity of African sub-sector. The major projects include countries will help minimize these the USD 20 billion Nigeria- gas costs. In this regard, the donor connection project, and the Sambangalou community should play a greater role in

Kaleta Hydropower and Kenya-Ethiopia African LICs while innovative Interconnection, both of which are worth financing mechanisms must be the more than USD 1 billion. focus in MICs. Notably, traditional sources of financing infrastructure The Bank also committed more than development remain important but USD 4 billion to ICA in two years (2007 private investment is critical in closing – 08), representing about 24% of total “The Bank also the current gaps and meeting future committed more than contributions to the initiative. The EU- Africa Partnership on Infrastructure’s infrastructure demand in Africa. USD 4 billion to ICA in two years (2007 – 08), strategy aims at enhancing good representing about 24% governance, peace and security, of total contributions to economic growth, trade, regional the initiative.” integration and interconnectivity, health, education, and a safe environment.

With this focus, this partnership seeks to reduce wastage through improved efficiency and environment friendly development.

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Annex 1a:

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Annex 1b:

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Annex 2: Aid, Aid Allocations to Infrastructure and Aid Dependency in African Countries, 2008 Total Aid Infrastructure Aid Aid Dependency Share of infrastructure Country name (USD mn) (USD mn) (%) in Aid (%) Algeria 250.7 28.3 0.1 11.3 Angola 674.4 42.4 0.8 6.3 606.3 137.2 9.1 22.6 Botswana 670.2 1.8 5.0 0.3 Burkina Faso 1284.1 119.5 15.7 9.3 647.6 54.4 58.4 8.4 1185.0 239.4 5.0 20.2 315.3 161.7 18.2 51.3 Central African Rep. 242.1 1.1 12.2 0.5 484.6 3.2 5.7 0.7 33.2 0.4 6.6 1.3

Congo, Dem. Rep. 2981.8 229.2 25.7 7.7

Congo, Rep. 505.1 0.8 4.8 0.2

756.8 182.9 3.2 24.2 Cote d'Ivoire Djibouti 119.0 10.9 12.1 9.2 1696.0 930.4 1.0 54.9 Equatorial 18.1 0.0 0.1 0.2 98.2 19.0 6.6 19.4 Ethiopia 3374.7 348.8 12.9 10.3 Gabon 118.4 63.5 0.8 53.6 Gambia 48.4 0.1 6.5 0.2 Ghana 2429.0 303.7 15.1 12.5 Guinea 349.4 4.0 7.7 1.1 Guinea-Bissau 124.9 0.2 27.3 0.2 Kenya 1432.5 17.6 4.7 1.2 443.3 1.3 27.8 0.3 1101.4 40.0 180.4 3.6

Libya 75.1 5.0 0.1 6.6

Madagascar 1173.4 357.6 12.4 30.5

786.9 10.7 18.4 1.4 Malawi 1266.1 431.0 14.5 34.0 Mauritania 187.7 8.1 5.3 4.3 Mauritius 167.8 21.7 1.8 12.9 Morocco 2783.1 1352.4 3.1 48.6 2851.3 387.1 28.6 13.6 Namibia 293.0 88.4 3.3 30.2 835.8 170.8 15.6 20.4 Nigeria 2221.8 489.1 1.1 22.0 Rwanda 1011.4 76.6 22.7 7.6 Sao Tome and Principe 53.4 1.8 30.5 3.3 1234.9 241.6 9.3 19.6 Seychelles 15.3 0.0 1.7 0.0

Sierra Leone 426.9 112.0 21.8 26.2

South Africa 1315.7 201.0 0.5 15.3

2332.6 94.4 4.0 4.0 Sudan Swaziland 126.9 2.5 4.3 1.9 3265.7 1233.3 15.8 37.8 422.5 73.2 13.3 17.3 1143.3 464.4 2.8 40.6 2050.0 188.1 12.4 9.2 1730.7 178.3 11.8 10.3 594.1 0.9 18.9 0.1 Total Africa 50355.8 9131.6 3.3 18.1 Source: AfDB Statistics and OECD Online Database

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Endnotes

13 1 Africa Infrastructure Diagnostic (AICD) Anyanwu, J. C. (2009) ‘Public-private

(2009). Partnerships in the Nigerian Energy Sector: Banks Roles and Lessons of Experience,’ in 2 The link between infrastructure and growth Tobin, J. B. and Parker, L. R. (eds) Joint in African countries (South Africa, Nigeria, Ventures, Mergers and Acquisitions, and Uganda and others) has been shown to be Capital Flow Nova Science Publishers, New positive (AICD, 2009). York. 3 http://www.un.org/ecosocdev/geninfo/afrec/ 14 subjindx/132inves.htm Shah, R. and Batley, R. (2009), ‘Private- Sector Investment in Infrastructure: Rational 4 http://www.informaworld.com/smpp/conten and Causality of Pro-poor Impacts’, t~db=all~ content=a789690695 Development Policy Review, Vol. 27 (4), 397 5 – 417. http://www.emergingafricafund.com/Files/ 15 MediaFiles/G8%20Africa%20Infrastructure OECD (2010) ‘Going for growth in Brazil, %20Conf%20June%2009.ppt. China, India, Indonesia and South Africa,’ in 6 ITU, 2010. Economic Policy Reforms: Going for Growth, May 2010. 7 Banerjee, S., Wodon, Q., Diallo, A., 16 Stevens and Freemantle (2010) ‘BRIC and Pushak, T., Uddin, H., Tsimpo, C. and Foster, V. (2008) Access, Affordability, and Africa: New sources of foreign capital mobilizing for Africa complementing and Alternatives: Modern Infrastructure Services in Africa, Africa Infrastructure Country competing with traditional investors,’ Standard Bank. Diagnostic. 17 8 Mercer 2010 Quality of Living Survey http://www.oecd.org/dataoecd/31/36/41865 http://www.mercer.com/qualityoflivingpr 534.pdf Most of the region’s cities rank below 100 in 18 Atta-Mensah (2004) ‘Commodity-Linked the eco-index. The highest-ranking cities are Bonds: A Potential Means for Less- (30), Victoria (38) and Developed Countries to Raise Foreign Johannesburg (54). Antananarivo in Capital’ Bank of Canada Working Paper (217) is at the bottom of the list. 2004-20.

19 9 Africa Infrastructure Country Diagnostic The key infrastructure projects approved 2009, World Bank, African Development by the Bank in 2009 included airport projects Bank, African Union, Agence Française de in Morocco and Tunisia, national road Développement, European Union, New projects in Burkina Faso, Cameroon, Chad, Economic Partnership for Africa’s Ghana, Guinea, Mali, , Malawi, Development, Public-Private Infrastructure Rwanda, Senegal and Uganda. The others Advisory Facility, and U.K. Department for are multinational road projects connecting International Development. Cameroon-Nigeria, Cameroon-Gabon, Kenya-Ethiopia and Mozambique-Malawi- 10 Africa Infrastructure Diagnostic (AICD) Zambia. The Bank Group (African (2009). Development Fund and the African 11 http://www.afdb.org/en/news- Development Bank) also approved power events/article/6th-infrastructure-consortium- projects in Botswana, Kenya, Lesotho, for-africa-ica-annual-meeting-agreement-for- Nigeria, South Africa and Tunisia. 20 closer-collaboration-on-regional-projects- The Bank’s commitment to this Fund at

among-stakeholders-6689/ the end of 2007/08 was USD18 million, with

12 USD22.5 million committed by UK’s DFID, Redifer, L. (2010), New Financing Germany and Norway. Other countries have Sources for Africa’s Infrastructure Deficit’, shown interest to contribute to the Fund. IMF Survey, (July 21). 21 The World Bank’s Multilateral Investment Guarantee Agency (MIGA) is also providing information on infrastructure investment opportunities in Africa where it has identified 162 projects in all sub-sectors.