Infrastructure and Poverty in Sub-Saharan Africa

The main objective of this book is to analyze the extent to which, how, and how fast the infrastructure needs of the poor have been met in Sub-Saharan Africa (SSA). The book also documents the extent to which some key policies have hurt or helped progress in trying to speed up the coverage expansion so clearly needed in the region.¹ Whenever possible, we also point to changes that are needed to speed up the processes.

Our collective understanding of the drivers of growth has evolved significantly over the last two decades (see box 2.1). Current theories and their empirical tests provided a strong case for an explicit recognition of infrastructure as an important driver of growth, and more so in the early stages of economic development. This should have been central to country strategies, including the PRSPs prepared by SSA countries since these were driving the allocation of resources across infrastructure sectors to sustain long-term development plans.¹ Yet the treatment of infrastructure issues in PRSPs has long been very weak. More generally, despite some progress, the specific treatment of the key policy and institutional reforms that need to be put in place to ensure the effectiveness of infrastructure investments in terms of growth is still relatively weak. This chapter provides a brief overview of the way in which infrastructure is being addressed by the new “macropolicy” tools adopted by the development community and how infrastructure has been treated in country strategies including PRSPs to date.

For anyone traveling to Africa, the physical evidence of an infrastructure gap is hard to deny. Demand is unmet and this is also what is shown by models estimated to explain why SSA is growing, trading, and reducing its poverty less than it should. The natural follow-up question should then be how much does Africa need to allocate to the infrastructure sectors to meet its growth, trade, and social targets. There are a number of approaches to measure these investment needs in any given sector. The most common approach at the sector level is a bottom-up approach in which information collected at the local level can be added up to get a sense of the total figure needed. In that context, investment requirements are assessed for each sector for a targeted coverage rate, for a given service quality level at a standard local or an international best-practice cost. This type of effort had been conducted for the water MDGs in 2003 but it had not been done for the other infrastructure sectors until recently. One of the main contributions of the AICD study has been to update the estimations for the water sector in 2008 and to conduct similar assessments for a very wide definition of infrastructure needs. Readers interested in the details of the approaches followed for each sector are invited to read the summary report of that study.¹

This chapter provides an overview of the evolution in the market structures and institutions of the various sectors. The description is partial because it mostly focuses only on two dimensions of market structures and institutions: (1) the extent to which there is some degree of PPI and (2) the extent to which governments have decided to signal their commitment to transparent and accountable regulation by creating an IRA for the infrastructure sectors.¹ In the mind of many, these two reforms have been the most important topic of discussion in policy circles working on the transformation of the institutions driving decisions and service delivery in infrastructure.