Africa's infrastructure development
Infrastructure development is a key driver for progress across the African continent and a critical enabler for productivity and sustainable economic growth.
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It contributes significantly to human development, poverty reduction, and the attainment of the Millennium Development Goals (MDGs). The Africa Infrastructure Country Diagnostic (AICD) results show that investment in infrastructure accounts for more than 50 per cent of the recent improvement in economic growth in Africa, and that it has the potential to achieve even more.
In spite of its enormous mineral and other natural resources, Africa has the lowest productivity of any region in the world, and this is largely attributable to serious infrastructural shortcomings across all the subsectors: energy, water, sanitation, transportation, and communications technology.
The international community at the G8 Summit of 2005 pledged significant support for the infrastructure sector. This was in recognition of the fact that Africa’s weak physical infrastructure base was impeding the region’s progress toward improved living standards, poverty reduction, domestic and international trade and investment, and socially inclusive GDP growth.
Recent research has also emphasised the catalytic effects of infrastructure development. The Commission on Growth and Development’s Growth Report: Strategies for Sustained Growth and Inclusive Development (2008) highlighted infrastructure investment as crucial to both structural transformation and export diversification.
Stern (1991) showed how adequate infrastructure is essential for productivity and growth, indicating that transport in particular is a driver of development.
In the same vein, the findings of Anyanwu and Erhijakpor (2009) indicate that road infrastructure significantly reduces poverty in Africa. Recent studies by Canning and Pedroni (2008) and Égert, Kozluk, and Sutherland (2009) also confirm the positive correlation between improved infrastructure and economic growth.
Despite robust economic growth rates of over five per cent per annum over the past two years, the World Economic Forum’s Global Competitiveness Index 2012–2013 confirms that Africa remains the least competitive global region. Inadequate infrastructure is cited as the third most serious constraint to doing business in the continent, after access to finance and corruption. This demonstrates the close linkage between infrastructure and the region’s competitiveness.
Moreover, the Africa Progress Panel, composed of such distinguished members as Kofi Annan, Michel Camdessus and Peter Eigen, has ranked infrastructure development as a key priority for the advancement of the continent, and has urged the G20 leadership to continue to give it their highest support.
It is against this background that the AfDB developed the Africa Infrastructure Development Index (AIDI) to monitor the status and progress of infrastructure development across the continent. The first edition of this index was published in April 2011 and the present bulletin extends its coverage.
The Infrastructure Index has now been updated and expanded to cover the period 2000–2010. This series of observations was based on data collected under the Africa Infrastructure Knowledge Programme (AIKP), which is hosted by the African Development Bank (see http:// www.infrastructureafrica.org/), as well as on other data sources.
The AIDI is based on four major components: (i) Transport; (ii) Electricity, (iii) ICT, and (iv) Water & Sanitation. These components are disaggregated into nine indicators that have a direct or indirect impact on productivity and economic growth.
SUB-REGIONAL ANALYSIS
According to the bank’s terminology, the continent comprises five geographical sub regions: Central Africa with seven countries and a total population of over 107 million people; East Africa with 12 countries and more than 280 million population; North Africa with six countries and a total population of 170 million; Southern Africa with 12 countries and 165 million inhabitants; and West Africa with 16 countries and more than 300 million inhabitants.
The AIDI gives a fairly stable ranking for the sub- regions throughout the period of analysis, with North Africa occupying the top position, followed by Southern Africa ranked second. Central Africa held the third position from 2000 through to 2009 but then lost one place to West Africa in 2010. East Africa has maintained its bottom position over the whole period. It should be noted that West and East Africa include a high number of low-income countries and fragile states.
The Africa Infrastructure Development Index (AIDI) is measured across four components that have an established linkage with infrastructure development. The AIDI findings indicate that the rankings for the top 10 countries have not changed significantly over 2000-2010.
The AIDI results can be interpreted to identify areas of relative strength and weakness, and to assess which infrastructure components in a country need improvement in order to step up overall infrastructure development in the future.
AfDB/Graphic Business