[QODLink]
Business
Hike sought for Africa spending
Billions needed to tackle poor state of power, road and water systems, World Bank says.
Last Modified: 12 Nov 2009 17:14
Sub-Saharan Africa has one quarter of the paved roads found in the developing world [EPA]

Sub-Saharan Africa needs to double its spending on infrastructure to $93bn a year in order to brings its road, water and energy systems up to 21st century standards, the World Bank has said.

Half of the money would be needed to address the poor state of the region's electricity grids, with 30 countries facing regular blackoputs, and paying high premiums for emergency power, a report published on Thursday said.

The investment needed would amount to 15 per cent of gross domestic product in the 24 states surveyed by the Infrastructure Consortium for Africa (ICA).

The report, titled Africa's Infrastructure: A Time for Transformation , said that the spending was necessary to tackle a situation that is cutting annual national growth by two point and productivity by 40 per cent. 

"Modern infrastructure is the backbone of an economy and the lack of it inhibits economic growth," Obiageli Ezekwesili, the World Bank vice-president for the Africa Region, said.

Inefficiencies

The $45bn a year currently invested in infrastructure was higher than expected, the World Bank said, but the report found that about $17bn of that was being wasted.  

"This report shows that investing more funds without tackling inefficiencies would be like pouring water into a leaking bucket"

Obiageli Ezekwesili,
World Bank vice-president for Africa

"This report shows that investing more funds without tackling inefficiencies would be like pouring water into a leaking bucket," Ezekwesili said.

"Africa can plug those leaks through reforms and policy improvements which will serve as a signal to investors that Africa is ready for business."

Sub-Saharan Africa needs to build 7,000 megawatts of capacity a year to meet the demands of the region's 800 million people, who currently have access to the same amount of power as Spain, with a population of just 45 million.

"Power consumption, at 124 kilowatt-hours per capita annually and falling, is only 10 per cent of that found elsewhere in the developing world, barely enough to power one 100-watt lightbulb per person for three hours a day," the report said.

The region also has less than one quarter of the paved roads found in other parts of the developing world, it said.

High costs

Low volume and lack of competition for such vital services also mean that costs for African consumers are "exceptionally high".

"Whether for power, water, road freight, mobile telephones, or internet services, the tariffs paid in Africa are several multiples of those paid in other parts of the developing world," the report said.

Moving one tonne of goods just one kilometre in Africa costs between four and 14 US cents, compared to between one and four cents in other developing regions, it said.

If all sub-Saharan Africa's 48 countries caught up with Mauritius, the Indian Ocean island that leads the region in infrastructure terms, overall growth would rise by 2.2 percentage points.

The ICA was launched at a G8 summit in Scotland in 2005 and its members include, among others, the G8, World Bank, African Development Bank and European Commission.

The World Bank provides financing and economic support to developing nations, but critics object to the conditions - such as trade liberalisation, privatisation and deregulation - that are attached to the assistance.

Source:
Agencies
Topics in this article
Organisation
Featured on Al Jazeera
Italy struggles to deal with growing flood of migrants willing to risk their lives to reach the nearest European shores.
Israel's Operation Protective Edge is the third major offensive on the Gaza Strip in six years.
Muslims and Arabs in the US say they face discrimination in many areas of life, 13 years after the 9/11 attacks.
At one UN site alone, approximately four children below the age of five are dying each day.