Can Infrastructure Investments Transform Sub-Saharan Africa’s Economies?

The high profile of infrastructure in the communiques of the World Bank and the International Monetary Fund at their annual meetings in 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, major donors and multilateral institutions investigated this challenge of addressing the region’s glaring infrastructure gap. The analysis estimated that the region needed $93 billion per year to fill this gap.

In the five years since the study, the response in tackling the infrastructure gap has been unprecedented, especially in terms of increased financing from multilateral institutions, private participation and Chinese financing. Although it is too early to expect substantive results from these efforts, given the long gestation period of infrastructure investments, it is important at this time to review and analyze how this response is distributed across the countries of sub-Saharan Africa and the different infrastructure sectors/sub-sectors.

Some questions about the progress of infrastructure development:

– Are there “orphan” sectors or countries that should be the subject of targeted emphasis?
– Is there an appropriate balance between regional, national and sub-national infrastructure?
– Is there sufficient attention to global governance that would ensure strategic coordination and sustainability?

Funding increases for infrastructure development have benefitted many sub-Saharan African countries. Investment numbers vary; but there are no clear “orphans” except for a limited number of fragile states. In absolute terms, the top recipients of external financing for 2009-2012 are concentrated in the five economies — South Africa, Nigeria, Ghana, Kenya and Ethiopia.

The energy sector has had the fastest growth across all external financing sources since 2009: It now attracts 45 percent of the total external finance. Although private investment serves a broad range of countries, it has been concentrated in the telecommunications sector.

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