Infrastructure, Regional Integration and Growth in Sub-Saharan Africa: Dealing with the disadvantages of Geography and Sovereign Fragmentation

Abstract

The main message of this paper is that public action by making the choice to invest in infrastructure, has to be taken to alleviate the plight of African economies which are endowed with adverse, natural or geographical aspects like landlockedness and tropical climate. Drawing from the existing literature of the various channels or means through which infrastructure affects growth, this paper argues for the big push in promoting infrastructure, that is necessary not only to break out of underdevelopment but, more importantly to be on the path to sustained growth. The latter being realized since infrastructure facilitates equitable, economic growth; by improving basic services to the poor; e.g. access to electricity, clean water and roads to connect the rural and urban areas i.e. the internal, vast stretches of sparsely populated, predominantly poor population with the coastal, more developed areas. Focusing on infrastructure is now seen in the purview of complementing public investment in social services, which are geared towards attainment of the Millenium Development Goals rather than competing for the governments’ scarce resources. Second, the importance of structural changes in public investment in infrastructure encompassing setting up of autonomous regulatory bodies, joint management with users of these services, and adoption of user pay principles to circumvent the externality problems associated with provision of public goods, are highlighted; in order to reduce the problem of lack of financing of recurrent costs for these projects, improve transparency and selectivity. Exploiting the pre-existing capacity of the private sector is emphasized in the management and project implementation stages, which also contributes towards enhancing the profitability of these ventures. Finally, apart from increasing public investment, the most important role to be played by the public sector in this changing scenario, will be to specifically engage in underwriting risks; to encourage private sector involvement in the face of additional problems related to poor integration in the region, fueled by deep sovereign and ethno-linguistic fragmentation.