Financing African Infrastructure: Can the World Deliver?
The high profile of infrastructure and access to related services in the communiques of the World Bank and the International Monetary Fund (IMF) at their annual meetings in late 2014 underscores the importance of this issue for development worldwide. Nowhere is lack of infrastructure more crucial and potentially transformational than in sub-Saharan Africa.
In 2009, the World Bank and major donors and multilateral institutions investigated this challenge of addressing the region’s glaring infrastructure gap. 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.
- World Bank 2009 Report: Africa’s Infrastructure: A Time for Transformation
- Benchmarks for financing needs and gaps
- Potential gains from efficiency and governance improvements
- Growing importance of infrastructure financing
- Emergence of new funding sources and new financing mechanisms
- What has been the trend of financing since 2009?
- What has been the distribution of financing across countries and sectors?
- Are there persistent “darlings” and “orphans”?
- Have gains from efficiency and governance been achieved?
- Is there effective coordination between financiers? Is there a coordinated “plan”?
Recent trends: Highlights
- Surge in financing: external and internal
- Growing importance of PPI and non-traditional sources
- Traditional multilateral banks still relevant in certain sectors / sub-sectors
- Domestic (budget) financing remains the largest source
- Wide distribution of financing across countries, although there are micro-patterns in sectors