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13.10.2008 Africa

African Infrastructure Country Diagnostic Study

By World Bank Ghana Office

A highlight of the seminar was the preliminary results of an AICD paper “Overhauling the Engine of Growth: Infrastructure in Africa,” which was presented by Vivien Foster.

The paper was co-authored by Foster, a Lead Economist, and Cecilia Briceño-Garmendia a Senior Infrastructure Economist, both in the World Bank's Africa Region. The research spanned 24 African countries. The paper's findings revealed significant facts about the enormity of Africa's infrastructure requirements, including:

The cost of redressing Africa's infrastructure deficit is a whopping $75 billion every year, a number split nearly evenly between investment needs of $38 billion and $37 billion for operations and maintenance

The annual estimate of investment needs of $38 billion annually is twice as high as an earlier estimate by the Commission for Africa

African countries are devoting more of their own resources to infrastructure than was previously thought, between 6-8 percent of GDP

Utility inefficiencies run high, and waste US$6 billion annually

Under-pricing of services below cost-recovery levels result in financial losses of US$5 billion every year

Power supply – or the lack of it – is by far Africa's greatest infrastructure challenge, and on every indicator, the power sector lags behind other developing countries; the 48 countries of Sub-Saharan Africa generate roughly the same amount of power as Spain

Sixty percent of Africa's hydroelectric potential is found in the Democratic Republic of Congo and Ethiopia, countries too poor to raise the multi-billion dollar financing needed to develop them.

On the fringes of the World Bank–International Monetary Fund Annual Meetings from October 6-13, the seminar served as a forum for an informed discussion and debate on alternatives to improving infrastructure services on the African continent. Several pertinent questions were raised: one on how the financial crisis would affect financing for infrastructure, and another on how the agenda for regional integration of infrastructure should be taken forward. Participants also discussed how careful planning can help reduce costs, for example by combining road transport infrastructure with the laying of cables for expanding communications' connectivity.

The overarching message – Africa needs both increased funding and improved efficiency to bridge the infrastructure gap – resonated with the audience.

The seminar was sponsored by the World Bank's Sustainable Development Network, the Africa Region of the Bank, and organized in conjunction with the Public-Private Infrastructure Advisory Facility, and the Infrastructure Consortium for Africa.

For more information Visit the World Bank Africa website