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Investing in Africa's Infrastructure: Financing and Policy Options

Author

Listed:
  • Paul Collier

    (Blavatnik School of Government, University of Oxford, Oxford OX1 4JJ, United Kingdom)

  • James Cust

    (Department of Economics, Oxford Centre for the Analysis of Resource Rich Economies (OxCarre), University of Oxford, Oxford OX1 3UQ, United Kingdom)

Abstract

Africa has a severe shortage of infrastructure. Addressing this shortage involves both correcting the problems of poor maintenance and underinvestment that have caused it and raising the finance for a phase of remedial investment. We review evidence that substantiates the shortage, in terms of both stocks and the potential for high rates of return. We then turn to the range of options for attracting remedial finance, focusing in particular on how they relate to the region's endowment of natural resources. Governments will need to build the regulatory and technical capacities to tap into this opportunity for leveraged private capital flows by reducing the risks associated with large, capital-intensive projects. Furthermore, governments must build the authority necessary to manage both the challenges associated with deferred public consumption and the time consistency needed to support long-term ventures.

Suggested Citation

  • Paul Collier & James Cust, 2015. "Investing in Africa's Infrastructure: Financing and Policy Options," Annual Review of Resource Economics, Annual Reviews, vol. 7(1), pages 473-493, October.
    • Handle: RePEc:anr:reseco:v:7:y:2015:p:473-493
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-resource-100814-124926
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    Citations

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    Cited by:

    1. Gurara, Daniel & Presbitero, Andrea & Sarmiento, Miguel, 2020. "Borrowing costs and the role of multilateral development banks: Evidence from cross-border syndicated bank lending," Journal of International Money and Finance, Elsevier, vol. 100(C).
    2. Mihalyi,David & Hwang,Jyhjong & Rivetti,Diego & Cust,James Frederick, 2022. "Resource-Backed Loans in Sub-Saharan Africa," Policy Research Working Paper Series 9923, The World Bank.
    3. Degnet, Mohammed B. & van der Werf, Edwin & Ingram, Verina & Wesseler, Justus, 2018. "Forest plantations’ investments in social services and local infrastructure: an analysis of private, FSC certified and state-owned, non-certified plantations in rural Tanzania," Land Use Policy, Elsevier, vol. 79(C), pages 68-83.
    4. Mohammed B. Degnet & Edwin van der Werf & Verina Ingram & Justus Wesseler, 2017. "Private Capital, Public Goods: Forest Plantations' Investment in Local Infrastructure and Social Services in Rural Tanzania," CESifo Working Paper Series 6690, CESifo.
    5. Mawejje, Joseph & Munyambonera, Ezra, 2017. "Financing Infrastructure Development In Uganda," Research Series 253562, Economic Policy Research Centre (EPRC).
    6. Inderst, Georg, 2020. "Social Infrastructure Finance and Institutional Investors. A Global Perspective," MPRA Paper 99239, University Library of Munich, Germany.
    7. Xu, Jiajun & Ru, Xinshun & Song, Pengcheng, 2021. "Can a new model of infrastructure financing mitigate credit rationing in poorly governed countries?," Economic Modelling, Elsevier, vol. 95(C), pages 111-120.

    More about this item

    Keywords

    infrastructure; public investment; Africa;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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