Infrastructure development plays a major role in promoting growth and reducing poverty. In Africa, however, underdeveloped infrastructure continues to be a binding constraint on sustainable development. Notably, African countries, through the continent’s Agenda 2063, recognize that developing infrastructure—transport, energy, water, and e-connectivity will be critical for the continent to assume a lasting place in the global economic system. The African Capacity Building Foundation (ACBF) has produced this occasional paper under its supported Strategic Studies Group (SSG) to provoke discussion and further investigation of critical capacity challenges to be addressed in developing infrastructure in Africa.
This occasional paper delves into important questions: What is the state of Africa’s infrastructure? What is infrastructure’s role in Africa’s economic performance? What strategies will finance infrastructure in Africa, and how effective are they? How do the various actors develop and finance infrastructure? And more important, what are the capacity imperatives for infrastructure development and financing in Africa?
One key message is that infrastructure quality is more important than infrastructure stocks for economic growth. Emphasis should be placed not on providing infrastructure bulk but on ensuring that public infrastructure can increase the rate of return on private capital. The three case-study countries (Kenya, Mauritius, and South Africa) show that capacity is lacking for governments to mobilize resources or tap capital markets for financing infrastructure. Similarly, there is a shortage of competent transaction advisors who can structure financing to meet issuers’ needs. Public officers lack the skills to interact effectively with private-sector financiers and to prepare and evaluate tenders. Where such systems are being tried, as in Kenya, modern computerized procurement and project-management systems are not being used to make the process more efficient.
It is important to establish autonomous, well-resourced, and technically competent public–private partnership (PPP) departments to streamline PPP management processes. The ACBF believes that producing knowledge on efficient infrastructure development and financing will enhance the evidence-based policymaking process on the continent, leading to sustainable infrastructure development and subsequent inclusive growth.