Doing Business in Africa The 8th Biennial IB InstituteJune 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 • 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
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)
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
Who Benefits from a focus on Infrastructure? THE PEOPLE!
THANK YOU!!! Acknowledgements: V. Foster D. Wheeler H. Parker Sources: World Bank, Africa Development Bank