**Figure 13. Public investment in Sub-Saharan Africa by resource abundance, 1960-2015** _(% GDP)_

<!-- Start of picture text --> 14%<br>12%<br>10%<br>8%<br>6%<br>4%<br>2%<br>0%<br>Oil Non‐oil No resource<br>1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014<br><!-- End of picture text --> _Source: International Monetary Fund (2017)_ There is a great deal of heterogeneity across countries in the distribution of public investment (as a percentage of GDP) in the Sub-Saharan Africa region: SSA countries can be classified by their investmentoutput ratios as low (less than 5 percent of GDP), medium (between 5 and 10 percent of GDP) and high (more than 10 percent of GDP).<sup>16</sup> Seven out of 45 countries in the region have low investment, 23 have medium investment, and 15 have high investment. Low investment countries in the region have an average public investment of 3.1 percent of GDP while medium countries have an average of 6.8 percent. High investment SSA countries have an average ratio of 18.2 percent of GDP. Note that the medium public investment group has the highest average private investment rate with 15.1 percent of GDP, followed by the high and low public investment groups (12.4 and 10 percent, respectively).

The level of public investment could be low in some SSA countries; however, it warrants to ask whether public investments crowds-in, say, the participation of (domestic and/or foreign) private investors in infrastructure sectors (say, transportation or energy projects). If that is the case, the relevant policy question becomes how to maximize the complementarities and prioritize public investment in sectors with high productivity and/or large positive spillover effects (for example, infrastructure). In contrast, if private investment is crowded-out by public investment, the relevant policy question is what can be done to reduce this crowding-out effect so that countries can reap more benefits from higher public <private?> investment (Cavallo and Daude 2011).

The World Bank (2017) examines the correlation between public and private investment ratios for 45 SSA countries over the period 1970-2015. It ranges from -0.59 (Equatorial Guinea) to 0.85 (Chad) and the regional median (average) public-private investment correlation is 0.11 (0.08). The report finds that: (i) 19 out of 45 countries display a negative correlation between public and private investment, and the median correlation for these 19 countries is -0.275. (ii) There is a positive association between private and public investment for 26 out of 45 SSA countries and their median correlation is 0.282. In other words, the evidence suggests that public and private investment are substitutes in 19 SSA countries while they are complements in 26 SSA countries. Although central measures of correlation do not appear to be that large, there are countries where either the degree of substitutability is important (say, Equatorial Guinea, Zambia, South Africa, and Senegal) or the extent of complementarity (say, Botswana, Zimbabwe, Rwanda, and Chad).

> 16 Note that the thresholds of 5 and 10 percent of GDP are similar to the bottom and top tercile of the distribution of investmentoutput ratios in the world for the period 2011-15.

_Infrastructure in Sub-Saharan Africa - 28_