Report: Bad roads slow Africa’s growth to a crawl

The poor quality of Africa’s infrastructure is costing the continent’s economies around two per cent of their potential economic growth each year.

The state of infrastructure in sub-Saharan Africa – its electricity, water, roads, and information and communications technology (ICT) – also reduces business productivity by as much as 40 per cent.

Africa’s Infrastructure: A Time for Transformation finds that Africa has the weakest infrastructure in the world but, ironically, Africans in some countries pay twice as much for basic services as people elsewhere.

The study, which was conducted in 24 African countries by a partnership of institutions – including the African Union Commission, the African Development Bank, the New Partnership for Africa’s Development, and the World Bank – is one of the most detailed one ever undertaken on the continent.

It argues that well functioning infrastructure is essential to Africa’s economic performance and that improving inefficiencies and reducing waste could result in major improvements in Africans’ lives.

The report estimates that $93 billion is needed annually over the next decade, more than twice what was previously thought, to bring Africa’s infrastructure up to a satisfactory standard.

Almost half of this would address the continent’s current power supply crisis that is hindering its growth.

The new estimate amounts to roughly 15 per cent of the continent’s gross domestic product.

The study also found, however, that existing spending on African infrastructure is much higher than previously known – at around $45 billion a year.

Most of this is domestically financed by African taxpayers and consumers.

But waste is a big problem in infrastructure provision and the report says a number of efficiency improvements could potentially expand the available resources by a further $17 billion.

However, even if major efficiencies are gained, there is still a funding gap of $31 billion every year, much of it for power and water infrastructure.

Relative to the size of their economies, the gap is daunting for low-income countries (who would need to spend an additional 9 per cent of their GDP) and particularly for the region’s fragile states (who would need to spend an additional 25 per cent of their GDP).

Resource-rich countries like Nigeria and Zambia face a more manageable funding gap of 4 per cent of GDP.

Particularly now with the global financial crisis, investing in African infrastructure is critical for Africa’s future.