THE CENTRAL AFRICAN REPUBLIC’S INFRASTRUCTURE: A CONTINENTAL PERSPECTIVE

# Financing an upgrade of the CAR’s infrastructure

This section develops a financial framework in which the cost of meeting infrastructure development targets is compared against the existing spending levels and patterns to quantify sector-specific funding gaps and possible financing sources. After estimating the price tag of achieving preestablished sectorspecific targets, the section examines infrastructure spending in the period 2002–07, identifying main sources of financing (public sector, private sector, official development assistance (ODA) from the member states of the Organisation for Economic Co-operation and Development, and assistance from non-OECD states), uses of funds for capital, operations and maintenance (O&M), and the relative importance of each sector against the existing budget envelope. Particular focus is given to public spending patterns, as well as to the identification and quantifying of inefficiencies in both on-budget and off-budget public spending. The section then evaluates—sector by sector—the funding gaps and discusses how these gaps might be covered by existing budgetary resources or the extension of the time horizon.

## Estimating sectoral spending needs

The cost of achieving the CAR’s infrastructure targets, discussed in this section, was estimated using sector-specific models developed within the AICD framework. The infrastructure deficit for each country was calculated using microeconomic models that take into account both growth-related and social demands for infrastructure, and incorporate costs of maintenance, rehabilitation, and expansion. The physical infrastructure targets are the grounds for the set of spending estimates. Starting at 2005, for most sectors a 10-year horizon was used as a timeline for attaining a number of key social targets for broader infrastructure access. Methodologies for estimating spending needs vary according to the characteristics of each sector, as follows: • _Transport._ The spending needs model for transport is based on a spatial analysis that assesses the costs of linking economic and demographic nodes through transport infrastructures with the objective of achieving regional, national, urban, and rural connectivity. The model identified key geographic and demographic features of each country, using geographic information system (GIS) data to measure the necessary distances. Costs are based on condition, type and standard of investment, and maintenance needs.

• _Irrigation._ The spending needs model for small-scale irrigation combines spatial information on current rain-fed crop production, irrigation potential, and exploitable runoff. The results provide unit revenue increases to be expected with the implementation of small-scale irrigation.

• _Water and sanitation_ . This model builds on the standards methodology developed by the Joint Monitoring Program of the United Nations to estimate the cost of meeting the Millennium Development Goals (MDGs) for water and sanitation. Estimates were based on minimum acceptable asset standards. It was assumed that relative prevalence of water and sanitation modalities remain broadly the same between 2006 and 2015, and services are upgraded for only a small segment of customers.

• _Power._ A dynamic model that combined economic growth and electrification targets was used to estimate power spending needs. The model simulated optimal (least-cost) strategies for generating, transmitting, and distributing electricity in response to demand increases. It also estimated the cost of 34