The per capita income rankings were correlated with the rankings obtained from the World Bank’s 2007 _Doing Business_ report. In 2007 Mauritius, Swaziland, South Africa, Botswana, and Namibia ranked 32nd, 76th, 29th, 48th, and 42nd in the world based on the ease-of-doing-business indicators. This index considers questions such as the number of days required to start a business and the ease of dealing with licenses, registering a property, trading across borders, employing workers, and so on. Other 2007 rankings include 83rd for Kenya, 97th for Ethiopia, 165th for Egypt, and 170th for Eritrea.

We showed the percentage of firms that _perceived_ telecommunications, electricity, customs clearance, and transport as major obstacles to their economic performance. Only in Benin, Kenya, and Zambia did more than 50 percent of firms identify telecommunications as a severe obstacle. Meanwhile, the quality of electricity provision is a major problem for more than 50 percent of firms in more than half of the countries in our sample. In Burundi, Cameroon, Benin, Burkina Faso, and Cape Verde, the percentage of firms considering electricity as a severe or very severe obstacle exceeded 80 percent; on the other hand, only 20 percent of firms in Morocco, South Africa, Botswana, and Namibia considered electricity a severe obstacle. Customs clearance was considered an acute problem in Benin, Kenya, Madagascar, Senegal, and Algeria. Finally, transportation was considered a severe obstacle by more than 70 percent of firms in Burkina Faso and Benin.

The World Bank’s 2007 Africa Competitiveness Report evaluated a wide range of factors related to economic activity, with infrastructure among them. Once again there were clearly different performance levels across the two blocks of countries. While in Namibia, South Africa, Botswana, Egypt, and Morocco, the quality of infrastructure exceeded the approval level, in the remaining countries this quality was rated low in most cases. The same held for the disaggregated results, including the number of telephone lines and the quality of ports, air transport, and electricity supply.

The difference between the two blocks becomes even more apparent when looking at the crossplots between GDP per capita relative to the United States and firms’ perceptions. A preliminary analysis of the cross-plots suggests two points: first, that there is an intuitive and negative relation between income level and infrastructure constraints; and, second, that the division of the two blocks of countries remains intact, showing now the largest dispersion in the constraint perceptions for the lowest per capita income group.

# _Findings_

Among the countries of the high-income-growth block, infrastructure has a low impact on TFP (see panel B of figures 5.5 and 5.6 and panel A of figure 6.24). Red, tape, corruption, and crime dominate over infrastructure in countries such as Mauritius, Egypt, and South Africa (figure 5.5, panel B). Infrastructure quality has a high impact on TFP in the countries of the low-income-growth block (see panel B of figures 5.5 and 5.6 and panel A of figure 6.24), but the impact is very negative (see panel B of figures 5.3 and 5.4), identifying important bottlenecks for TFP growth.

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