Idris Ahmed
12 November 2009
A new study has shown that Sub Saharan Africa needs $93 billion annually to fix its infrastructure in the next ten years.The study recently conducted in 24 African countries, including Nigeria said that the amount is more than twice what was previously thought.
The amount is required to fix electricity, water, roads, and information and communications technology (ICT) and to cut national economic growth by 2 percentage points every year and reduces business productivity by as much as 40 percent.
The report titled: "Africa's Infrastructure: A Time for Transformation" was released by the World Bank yesterday.
"Almost half of this amount is needed to address the continent's current power supply crisis that is hindering Africa's growth. The new estimate amounts to roughly 15 percent of the continent's gross domestic product (GDP), comparable to what China invested in infrastructure over the last decade", the report said.
According to the report, Africa has the weakest infrastructure in the world, "but ironically Africans in some countries pay twice as much for basic services as people elsewhere."
The report said that well functioning infrastructure is essential to Africa's economic performance and that improving inefficiencies and reducing waste could result in major improvements in African's lives.
The study found that existing spending on African infrastructure is much higher than previously known, $45 billion a year. Also surprising was the fact that most of this is domestically financed by African tax payers and consumers.
The study also found that there is also considerable wastage to address. A number of efficiency improvements could potentially expand the available resources by a further $17 billion.
"However, even if major efficiencies are gained there is still a funding gap of $31 billion every year, much of it for power and water infrastructure in fragile states", the report said.
According to the report, relative to the size of their economies, the funding gap is daunting for the region's low-income countries (who would need to spend an additional 9 percent of their GDP) and particularly for the region's fragile states (who would need to spend an additional 25 percent of their GDP).
The report said that resource-rich countries like Nigeria and Zambia face a more manageable funding gap of 4 percent of GDP. It said that investing in African infrastructure is critical for Africa's future.
World Bank Vice President for the Africa Region Obiageli Ezekwesili said that modern infrastructure is the backbone of an economy and the lack of it inhibits economic growth.
She said: "This report shows that investing more funds without tackling inefficiencies would be like pouring water into a leaking bucket. Africa can plug those leaks through reforms and policy improvements which will serve as a signal to investors that Africa is ready for business."
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