Privatizing Africa S Infrastructure

This paper examines the promise and challenge of infrastructure privatization in sub-Saharan Africa, with particular emphasis on power, telecommunications, water, rail, ports and airports. The paper places primary emphasis on mobilizing private investment in infrastructure. To realize the potential of infrastructure privatization in sub-Saharan Africa, four main challenges must be addressed: a) concerns over market size, affordability and payment risks; b) establishing adequate legal and regulatory frameworks; c) dealing with non commercial risks; and d) mobilizing local finance. The paper examines these four areas and gives elements of a future strategy for the World Bank Group.

Why is the private sector yet to take off in much sub-Saharan Africa? Drawing on a unique set of enterprise surveys, Vijaya Ramachandran and her co-authors identify the biggest obstacles: inadequate infrastructure (especially unreliable electricity and crumbing roads) and burdensome regulation. They then show how ethnic minorities dominate the private sector in many countries, inhibiting competition and demands for a better business environment, and thus impeding the emergence of an entrepreneurial middle class. Based on this careful diagnosis, the authors suggest investing in infrastructure and reforming regulation to lower the cost of doing business, and increasing the access to education of a broader-based business class that crosses ethnic divides. Book jacket.

Evaluates the role of infrastructure in promoting economic growth and poverty reduction in Africa. Examines complementary physical infrastructure: telecommunications, power, transport (roads, railways, ports and airports) and water supply. Explores Africa's infrastructure endowment and financing options.

Governments have long recognized the vital role that modern infrastructure services play in economic growth and poverty alleviation. For much of the post-Second World War period, most governments entrusted delivery of these services to state-owned monopolies. But in many developing countries, the results were disappointing. Public sector monopolies were plagued by inefficiency. Many were strapped for resources because governments succumbed to populist pressures to hold prices below costs. Fiscal pressures, and the success of the pioneers of the privatization of infrastructure services, provided governments with a new paradigm. Many governments sought to involve the private sector in the provision and financing of infrastructure services. The shift to the private provision that occurred during the 1990s was much more rapid and widespread than had been anticipated at the start of the decade. By 2001, developing countries had seen over $755 billion of investment flows in nearly 2500 infrastructure projects. However, these flows peaked in 1997, and have fallen more or less steadily ever since. These declines have been accompanied by high profile cancellations or renegotiations of some projects, a reduction in investor appetite for these activities and, in some parts of the world, a shift in public opinion against the private provision of infrastructure services. The current sense of disillusionment stands in stark contrast to what should in retrospect be surprise at the spectacular growth of private infrastructure during the 1990s.

it is increasingly apparent that the privatization experiment in sub-Saharan Africa has failed. This book shows that the state is set to dominate service delivery for the foreseeable future in much of the region, and that the public sector must be considered as a viable policy option for the delivery of water and electricity.

Sustainable infrastructure development is vital for Africa s prosperity. And now is the time to begin the transformation. This volume is the culmination of an unprecedented effort to document, analyze, and interpret the full extent of the challenge in developing Sub-Saharan Africa s infrastructure sectors. As a result, it represents the most comprehensive reference currently available on infrastructure in the region. The book covers the five main economic infrastructure sectors information and communication technology, irrigation, power, transport, and water and sanitation. 'Africa s Infrastructure: A Time for Transformation' reflects the collaboration of a wide array of African regional institutions and development partners under the auspices of the Infrastructure Consortium for Africa. It presents the findings of the Africa Infrastructure Country Diagnostic (AICD), a project launched following a commitment in 2005 by the international community (after the G8 summit at Gleneagles, Scotland) to scale up financial support for infrastructure development in Africa. The lack of reliable information in this area made it difficult to evaluate the success of past interventions, prioritize current allocations, and provide benchmarks for measuring future progress, hence the need for the AICD. Africa s infrastructure sectors lag well behind those of the rest of the world, and the gap is widening. Some of the main policy-relevant findings highlighted in the book include the following: infrastructure in the region is exceptionally expensive, with tariffs being many times higher than those found elsewhere. Inadequate and expensive infrastructure is retarding growth by 2 percentage points each year. Solving the problem will cost over US$90 billion per year, which is more than twice what is being spent in Africa today. However, money alone is not the answer. Prudent policies, wise management, and sound maintenance can improve efficiency, thereby stretching the infrastructure dollar. There is the potential to recover an additional US$17 billion a year from within the existing infrastructure resource envelope simply by improving efficiency. For example, improved revenue collection and utility management could generate US$3.3 billion per year. Regional power trade could reduce annual costs by US$2 billion. And deregulating the trucking industry could reduce freight costs by one-half. So, raising more funds without also tackling inefficiencies would be like pouring water into a leaking bucket. Finally, the power sector and fragile states represent particular challenges. Even if every efficiency in every infrastructure sector could be captured, a substantial funding gap of $31 billion a year would remain. Nevertheless, the African people and economies cannot wait any longer. Now is the time to begin the transformation to sustainable development.

Provides a state-of-the art review of privatization issues and research questions as a prelude to an in-depth study of the economic and social impact of privatization.

This contributed volume examines development efforts in sub-Saharan Africa and the role privatization and foreign investment can play. The focus is on African and international capital mobility and recent experience in private investment in contemporary African states. While government in Africa continues to have a hand in economic and political matters, private enterprise, private investment, and market forces are becoming increasingly active. The volume reveals these new directions in development practice in Africa and analyzes the difficulties which government, while well-intended, has created in the past. Contributors from the United States and Africa pose questions and examine scenarios for investment in sub-Saharan Africa. And while no single strategy is agreed upon, they provide overwhelming evidence that it has been the failure of prior central policies which has held these nations back, and that hope for the 1990's lies in the unleashing of the private sector. This work will be of interest to scholars and policy-makers in development economics, international trade and finance, and African studies.