Liberia’s Infrastructure: A Continental Perspective

2. Liberia’s Infrastructure: A Continental Perspective

3. Africa Infrastructure Country Diagnostic: a multi-stakeholder effort

4. Methodology and approach • Methodology • Data collection by local/international consultants and Bank staff from national sources based on standardized methodology • Baseline year for data is 2007-2008 • Approach • Focus on benchmarking Liberia’s infrastructure against African neighbors • Benchmarking group includes Resource-rich countries, Low Income Non Fragile (LIC-Non Fragile), West African neighbors, and regional outliers

5. Why infrastructure matters?

6. Across West Africa ICT has been a significant boost to growth, while power has been a drag Changes in growth per capita due to changes in infrastructure (2001-5 vs. 1991-5)

7. Addressing infrastructure deficiencies could boost West African growth by 2 to 5 percentage points Potential changes in growth per capita from improving infrastructure to level of African leader (Mauritius)

8. Key Message #1 Road spending is not adequate to rehabilitate and maintain deteriorated network

9. Traffic concentrated along mining corridors that converge on city of Monrovia

10. Benchmarking indicates poor condition and low paving, alongside relatively high density and low traffic

11. Maintenance and rehabilitation needs of main road network are seriously under-funded at present

12. Optimal fuel levy would be very high suggesting need for a hybrid approach to maintenance funding

13. Liberia is already making a significant effort on road sector spending

14. The key objective is connectivity, which can be achieved at a variety of different standards

15. Cost implications of alternative standards can be very high – a factor of two to one

16. Road freight transport is particularly slow and expensive in West Africa

17. Key Message #2 Freeport of Monrovia now performing quite well by regional standards

18. Benchmark indicates Freeport of Monrovia performing relatively efficiently

19. Key Message #3 Resurgence of air traffic, but safety and security issues remain a concern

20. Liberia’s air transport market is small but competitive, but striking lack of renewal of fleet

21. Air transport activity rebounded following collapse of regional carriers in early 2000s

22. Key Message #4 Need to consider low cost solutions to address huge challenge of achieving WSS MDGs

23. Low dependency on surface water but over half of the population practices open defecation

24. No progress on open defecation during the last 20 years, major slump in piped water

25. Water hidden costs at 124% of revenues are towards middle of West African range

26. Costs of meeting WSS MDGs is very sensitive to choice of technology for service provision

27. Key Message #5 Urgent need to slash power costs and expand capacity as a precursor to raising access

28. Notable lack of power infrastructure, planned interconnections will play key role

29. Exceptionally low generation capacity and access, exceptionally high prices and even higher costs

30. Liberia’s hidden costs of power are relatively high by regional standards

31. Liberia’s power prices are the highest in Africa Average effective tariff (US cents per kWh)

32. Power costs in Liberia can be expected to fall substantially in medium term Capital subsidy US cents per kWh Operating subsidy

33. Depending on extent of demand growth needs vary from US$122 to US$243 mn pa Note: Generation costs taken from World Bank, 2010

34. Though currently experiencing shortages, medium term power prospects are strong in Cote d’Ivoire • Currently WAPP’s largest power exporter supplying 1.8 TWh to Burkina Faso and Ghana • This is already much more than Liberia’s maximum projected demand of 1.2 TWh in 2020 • Continued to honor power export contracts during recent crisis period 2003/07 • Significant hydro and gas resources available with relatively low LRMC US$0.07/kWh • Gas reserves limited but ability to tap into Ghana and Nigeria via West Africa Gas Pipeline extension • Strong track record of financing investment in power generation through IPPs (circa 500 MW to date)

35. Guinea is the ‘sleeping giant’ of the WAPP, but major challenges remain to be overcome • WAPP’s largest potential power exporter with possibility of supplying 17.4 TWh into regional pool • This is more than ten times Liberia’s maximum projected demand of 1.2 TWh in 2020 by 2020 • Based on development of 3,700 MW of cost-effective hydro-power with lowest LRMC in WAPP: US$0.06/kWh • Cost of developing power very high relative to Guinea’s economy (>20% GDP) would entail regional finance • Difficult political situation and weak track record on power are additional challenges

36. A long term vision of regional power trade?

37. Key Message #6 Huge strides on GSM, next frontiers are internet connectivity and rural access

38. GSM coverage developing rapidly, imminent access to submarine cable

39. Mobile footprint has grown at a much slower pace than GSM penetration

40. Benchmarking indicates strong level of mobile penetration and exceptionally low calling costs Source: Preliminary results AICD 2008

41. High international call charges driven both by technology and market power

42. Significant potential for private expansion of GSM coverage, but high coverage gap

43. Key Message #7 For Liberia to catch-up on infrastructure within a decade would take spending of US$350-600 million annually

44. Possible infrastructure targets over next ten years

45. To meet these targets based on conventional standards would cost US$600 mn pa for a decade

46. A more pragmatic set of standards would bring the cost down to US$344 mn pa overall

47. Even more pragmatic standards represent a huge burden relative to Liberia’s economy

48. Key Message #8 Liberia has been spending around US$90 million per year on infrastructure (around 10% GDP)

49. Recent infrastructure spending has been US$90 mn pa, most investment is either ODA or PPI

50. ODA commitments increased in recent years