# **A. Introduction**

After two decades of strong growth that outpaced that of rich countries, economic activity in the SubSaharan Africa region has decelerated. There is an urgent need to regain the growth momentum amid an external environment characterized by lower global trade and commodity prices that may stay lower than precrisis levels for a longer period of time. Experts in academic and policy circles are advocating a “big push” to help the region escape poverty and narrow the income per capita gap vis-à-vis the rest of the developing world (for example, Sachs et al. 2004; Collier 2006; IMF 2014). These calls for action propose a wide array of policy agendas; however, virtually all of them list infrastructure development among the top priorities in the region.

An adequate supply of infrastructure services has long been viewed as a key ingredient for economic development in the academic literature (since the work of Aschauer 1989) as well as in policy debate (e.g. World Bank 1994; IMF 2014). Over the past quarter century, academic research has devoted considerable effort to theoretical and empirical analysis of the contribution of infrastructure development to growth and productivity. More recently, increasing attention has also been paid to the impact of infrastructure on poverty and inequality (Estache et al. 2002; World Bank 2003, 2006; Calderon and Serven 2004, 2010). An emerging consensus from the literature is that, under the right conditions, infrastructure development can play a major role in promoting growth and equity—and, through both channels, help reduce poverty.

Sub-Saharan Africa ranks at the bottom of all developing regions in virtually all dimensions of infrastructure performance. The region, which houses almost one-seventh of the world’s population, has a score of 2.91 in the infrastructure category of the World Economic Forum’s (WEF’s) Global Competitiveness Report.<sup>2</sup> This score clearly states that there is a severe infrastructure bottleneck to be addressed. The region has some inherent characteristics that may enhance the potential role of infrastructure for its economic development—notably, the large number of landlocked countries, which are home to a major proportion of the region’s total population (about 40 percent), and the remoteness of most of the region’s economies from global market centers (Calderon and Serven 2010).<sup>3</sup> The geographic disadvantages of the region result in high transport costs that hinder intra- and interregional trade (Limao and Venables 2001; Elbadawi et al. 2006; Behar and Manners 2008). Limited openness to trade is the main factor behind the stylized fact that, ceteris paribus, landlocked countries tend to grow slower than others.<sup>4</sup> However, adequate transportation and communication facilities can help overcome these geographic disadvantages. The region’s problem is that poor infrastructure adds to its geographic disadvantage.

The main findings of this paper can be summarized as follows: first, there is a large gap in terms of quantity, quality and access to infrastructure. Our scorecard shows that the magnitude of this gap depends on the country, sector, and dimension under analysis. For instance, the region exhibits a dismal performance in the provision of reliable electricity and the length and quality of roads —especially among low-income-countries (LICs) and lower-middle-income countries (LMCs). Second, narrowing the infrastructure gap has potentially large growth benefits —and the growth benefits are the largest in the sectors with the greater gaps relative to global benchmarks. Third, meeting the infrastructure financing needs of the region is not trivial. It requires not only more efficient domestic resource mobilization from SSA governments but also innovative solutions to crowd-in private financing (e.g. the Cascade approach). Finally, strengthening the institutions governing public investment management systems and government procurement would increase the output multiplier of investment spending.

> 2 This index takes values from 0 to 7 and higher scores indicate more competitiveness.

> 3 Storeygard (2016) argues that the lack of infrastructure could also reflect the low population density in the region—which may play a role in explaining the low maintenance of most infrastructure networks.

> 4 Note that 16 countries in the region are landlocked while 7 countries are insular.

_Infrastructure in Sub-Saharan Africa - 2_