Infrastructure is viewed as a crucial ingredient to foster growth and productivity. Amid the post-global financial crisis slowdown, Sub-Saharan Africa is in dire need to continue the growth momentum it experienced during the period of the Africa Rising narrative.

An emerging consensus in the empirical literature is that, under the right circumstances, an adequate supply of infrastructure can help foster growth in the region.

This paper provides a scorecard on infrastructure development in Sub-Saharan Africa over the past decades along four sectors (telecommunications, electric power, transportation, and water and sanitation) and three dimensions (quantity, quality, and access).

First, it documents the existence of a large gap in infrastructure in the region – although the magnitude of the gap depends on the sector, dimension, and country/group. Second, the potential growth benefits from closing the infrastructure gap are large. Third, the infrastructure financing needs are very large, and the public sector so far is unable to meet these needs. Other options that involve the private sector may be available for the region.

Finally, there is room for improving the efficiency of public infrastructure spending (that is, the quality of public investment management systems and procurement methods), which, in turn, may increase the output multiplier of investment spending.

Introduction

After two decades of strong growth that outpaced that of rich countries, economic activity in the SubSaharan Africa region has decelerated. There is an urgent need to regain the growth momentum amid an external environment characterized by lower global trade and commodity prices that may stay lower than pre-crisis levels for a longer period of time. Experts in academic and policy circles are advocating a “big push” to help the region escape poverty and narrow the income per capita gap vis-à-vis the rest of the developing world. These calls for action propose a wide array of policy agendas; however, virtually all of them list infrastructure development among the top priorities in the region.

An adequate supply of infrastructure services has long been viewed as a key ingredient for economic development in the academic literature as well as in policy debate. Over the past quarter century, academic research has devoted considerable effort to theoretical and empirical analysis of the contribution of infrastructure development to growth and productivity. More recently, increasing attention has also been paid to the impact of infrastructure on poverty and inequality. An emerging consensus from the literature is that, under the right conditions, infrastructure development can play a major role in promoting growth and equity – and, through both channels, help reduce poverty.

Sub-Saharan Africa ranks at the bottom of all developing regions in virtually all dimensions of infrastructure performance. The region, which houses almost one-seventh of the world’s population, has a score of 2.91 in the infrastructure category of the World Economic Forum’s (WEF’s) Global Competitiveness Report. This score clearly states that there is a severe infrastructure bottleneck to be addressed. The region has some inherent characteristics that may enhance the potential role of infrastructure for its economic development – notably, the large number of landlocked countries, which are home to a major proportion of the region’s total population (about 40 percent), and the remoteness of most of the region’s economies from global market centers.

The geographic disadvantages of the region result in high transport costs that hinder intra- and interregional trade. Limited openness to trade is the main factor behind the stylized fact that, ceteris paribus, landlocked countries tend to grow slower than others. However, adequate transportation and communication facilities can help overcome these geographic disadvantages. The region’s problem is that poor infrastructure adds to its geographic disadvantage.

The main findings of this paper can be summarized as follows: first, there is a large gap in terms of quantity, quality and access to infrastructure. Our scorecard shows that the magnitude of this gap depends on the country, sector, and dimension under analysis. For instance, the region exhibits a dismal performance in the provision of reliable electricity and the length and quality of roads – especially among low-income-countries (LICs) and lower-middle-income countries (LMCs). Second, narrowing the infrastructure gap has potentially large growth benefits – and the growth benefits are the largest in the sectors with the greater gaps relative to global benchmarks. Third, meeting the infrastructure financing needs of the region is not trivial. It requires not only more efficient domestic resource mobilization from SSA governments but also innovative solutions to crowd-in private financing (e.g. the Cascade approach). Finally, strengthening the institutions governing public investment management systems and government procurement would increase the output multiplier of investment spending.

Section B compares the trends in infrastructure development along different sectors and dimensions from an international perspective.5 We compare the performance of the region (as well as selected groups/countries) vis-à-vis selected world geographic/income region/sub-regions. This analysis provides a scorecard of the magnitude of infrastructure gaps in Sub-Saharan Africa. At the country level, it conducts a benchmarking analysis of SSA countries vis-à-vis their level of development while simultaneously accounting for potential demographic and geographic drivers of infrastructure.

This paper is a product of the Office of the Chief Economist, Africa Region. It forms part of the background analysis for the Africa’s Pulse, Volume 15 (April 2017). The views expressed in this paper are those of the authors, and do not necessarily reflect those of the World Bank or its Boards of Directors.