T he international community has recently committed itself to scaling up development assistance to Africa, in part to address the continent’s major infrastructure deficit. But given its income and other constraints, what level of infrastructure should Africa aim for? A related issue is how well African institutions currently perform in sustaining and expanding infrastructure stocks based on the resources that they have at their disposal. Both questions are amenable to analysis through cross-country benchmarking of infrastructure stocks.

The objective of this paper is to shed light on Africa’s current infrastructure endowment and clarify its future infrastructure goals. We pursue that objective by benchmarking the region’s stock of key infrastructure—including information and communication technology (ICT), power, roads, and water—against a dataset comprising 155 countries over the period 1960 to 2005. The paper also sheds light on subregional differences, by comparing infrastructure stocks between southern, central, eastern, and western Africa. In addition to pinpointing the factors that have contributed to low infrastructure development on the continent, the benchmarking models serve to identify suitable infrastructure targets that take into account the environmental difficulties that countries face.

The paper is divided into three main sections. Section 1 lays down the methodological framework used in the paper and relates it to the academic literature. Section 2 undertakes a cross-sectional analysis that identifies the extent to which differences in infrastructure stocks across countries can be explained in terms of differences in the geographical, demographic, and economic environment that they face. Section 3 presents a panel data analysis that incorporates the evolution of infrastructure stocks over time and thus clarifies the role of historical factors in determining today’s infrastructure endowments.

# 1   Methodological framework

Benchmarking is a technique widely used in the management and regulatory fields to compare the performance of firms against relevant peer groups. The benchmarking technique employed in this paper was first proposed by Shleifer (1985), as a means of regulating so-called “natural monopolies.” Shleifer argued that regulators should select socially optimal prices for markets served by natural monopolies based on cost data from “similar” firms. Our approach also resembles that used by Battese and Coelli (1993) to determine levels of “technical inefficiency” among firms in a particular industry. Battese and Coelli estimated industry-level production functions based on firm-level data and defined the distance between a firm’s actual and predicted levels of production as its “technical inefficiency.” More recently, the World Bank’s annual _Doing Business_ report has illustrated the application of benchmarking techniques at the country level. By creating a global database of investment climate indicators and conducting crosscountry comparisons, _Doing Business_ has prompted a global debate about how to reduce red tape and motivated policy makers to improve their competitiveness. A similar approach has been applied to the infrastructure sectors in recent World Bank work at the country level (World Bank, 2004, 2005a, 2005b). Research in this area has benefited greatly from the availability of an international panel of data on infrastructure stocks provided in Estache and Goicoechea (2005).