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Doing Business in Africa

Doing Business in Africa. The 8 th Biennial IB Institute June 2009. Infrastructure: the Engine of Growth in Africa Anthony Ross, PhD Associate Prof. SCM Michigan State University Donald Gordon International Scholar, University of Capetown, South Africa. Agenda: Doing Business in Africa .

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Doing Business in Africa

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  1. Doing Business in Africa The 8th Biennial IB InstituteJune 2009

  2. Infrastructure: the Engine of Growth in Africa Anthony Ross, PhD Associate Prof. SCM Michigan State University Donald Gordon International Scholar, University of Capetown, South Africa

  3. Agenda: Doing Business in Africa • Overview of the African Continent • Trade Patterns in African Nations • Infrastructure and Doing Business • The Missing Linkages • The Cost of Catching-up • Infrastructure Spending • Closing Remarks

  4. Overview of African Continent- Major Cities

  5. Overview Facts • 71 Countries • Each with 3-12 Tribal languages on average • 48 / 71 countries experience rising per capita income • Only 10/48 exceed 5% since 2004 • Poverty reduction requires 7% • 1990- 2005 Infrastructure contributed 1% to per capita income growth • Catching-up to South Korea’s level of development means 2.6% income growth • African countries lag behind their peer LICs around the world (paved roads, ICT, power generation, water)

  6. Overview of Trade Patterns in Africa (USD mil)

  7. Trade Flows Between Countries & Cities

  8. Current Network Trade Flows (2008)

  9. Where the Rubber Meets the Road

  10. Issues of Being A Landlocked Country

  11. What are the Missing Linkages? • Infrastructure networks are highly fragmented (due to sovereignty) • Inability to share transboundary commons • Under-developed hydro and thermal energy resources concentrated in remote areas (low demand or to poor to invest) • ICT connectivity lacking: satellite vs submarine cable • Power generation investment of USD 500 million / yr through 2015 is required • Road Investment and Maintenance are poor. (sea corridors into LLCs is the current focus. But effective speed is only 10km/hr due to borders and ports

  12. Africa’s ICT and INLAND WATER SOURCES

  13. Africa’s Road Network and Power Generation

  14. The Infrastructure Gap

  15. Connecting Population Centers

  16. Proposed Trans-African Travel Corridors

  17. Projected Benefits to Trade from Improvements

  18. The Cost of Catching up- some benchmarks

  19. Current Public Spending on Infrastructure

  20. Getting More Out of Public Spending

  21. Trade Improvements from Better Infrastructure

  22. Who Benefits from a focus on Infrastructure? THE PEOPLE!

  23. THANK YOU!!! Acknowledgements: V. Foster D. Wheeler H. Parker Sources: World Bank, Africa Development Bank

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