# **6.1 Infrastructure impacts on TFP by country**

_High-growth countries in southern Africa_

**Mauritius (MUS).** Mauritius is the top-ranked in terms of per capita GDP and demeaned aggregate productivity, and the second according to the DBR (2007) and firms’ perceptions of the quality of infrastructure (Table C.1). The relative contribution of infrastructure to average log productivity is 26.6 percent—one of the lowest among the African countries considered (see figure 5.5, panel B, and figure 6.14, panel B). The most important constraint on productivity comes from the number of days to clear customs for exports (17 percent on average) (see figure 6.14); 5.2 percent is due to the use of IC technologies (positive factor); and low-quality provision of electricity and water accounts for only 2 percent of the average log productivity.

**Swaziland (SWZ).** Swaziland is ranked second in terms of per capita GDP (Table C.1). Productivity of firms is negatively affected by shipment losses in customs, the number of power outages, and the average duration of transport by road (see figure 6.20). These results are common to Namibia and Botswana since the countries are pooled together for estimation. The use of generators has a positive sign, meaning that it stimulates productivity. Country-specific results for Swaziland show that the largest contribution to average log productivity comes from problems in customs during the export process (10 percent), and from the number of power outages (9 percent).

**South Africa (ZAF).** South Africa is ranked third based on per capita GDP and demeaned aggregate productivity (Table C.1). Productivity is negatively affected by the days to clear customs to import, the sales lost due to power outages, the number of water outages, the time waiting for an electricity supply, and sales lost due to delivery delays. Therefore, the low quality of the customs services, electricity services, and water affects productivity performance at the firm level in South Africa. The contribution to average log TFP of electricity provision is 6.9 percent, and the contribution of water provision is 5.7 percent. Time wasted in customs while importing accounts for 9.4 percent of the average log productivity. Lastly, problems in transport services represent 5.7 percent of average log productivity (see figure 6.19).

**Botswana (BWA).** Botswana is ranked fourth based on per capita income (DBR, 2007) and on perceptions and sixth in terms of demeaned aggregate productivity. The productivity of firms located in Botswana is affected by shipment losses in customs while exporting (negative), power outages (negative), the percentage of electricity that comes from firm’s own generators (positive), and the average duration of transport by road (negative) (see panel A of figure 6.3 and panel B of figure 5.5). These marginal effects are common to Namibia and Swaziland since the countries are pooled together for estimation. Country-specific results show that the largest contributor to both average log productivity and to allocative efficiency is shipment loss in customs while exporting (panel B). Simulations show that the largest productivity improvement comes from reduction in power outages (panel D of figure 6.3). That is, according to our simulations, if the number of power outages suffered by firms in Botswana were reduced by 20 percent, average productivity could increase by 2.1 percent.

55