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1
Financing African Infrastructure:Can the World Deliver?
Amadou SyDirector, Africa Growth Initiative at BROOKINGS
Presentation at Financing the Sustainable Development Goals International Conference
Accra, March 18, 2015.
2
Financing African Infrastructure
Forthcoming report from BROOKINGS (Gutman, Sy, and Chattopadhyay, 2015)
• Background and Key Questions
• Recent trends: Highlights and Concerns
• Recommendations
3
Recent trends: Highlights
• Surge in financing: external and internal
• Growing importance of PPI and non-traditional sources
• Traditional multilateral banks still relevant in certain sectors / sub-sectors
• Domestic (budget) financing remains the largest source
• Wide distribution of financing across countries, although there are micro-patterns in sectors
4
Surge in external financing
0
5000
10000
15000
20000
25000
30000
3500019
90
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
US$ millions
PPI China ODF
Source: Gutman, Sy, and Chattopadhyay (2015).
5
External financing concentration (2009-12)
Source: Gutman, Sy, and Chattopadhyay (2015).
17%
11%
10%
8%7%
47%
South Africa
Nigeria
Ghana
Kenya
Ethiopia
Other (46)
6
Energy expanding, telecom maturing
0
5000
10000
15000
20000
25000
30000
35000US$ millions
Energy Telecom Transport Water Supply & Sanitation
Source: Gutman, Sy, and Chattopadhyay (2015).
7
PPI dominant in telecom (2005-2013)
19%
2%
64%
0%
4%1%
10%
0% 0%Electricity
Natural Gas
Telecom
Airports
Railroads
Roads
Seaports
Water Treatment
Water Utility
Source: Gutman, Sy, and Chattopadhyay (2015).
8
PPI: Top recipients
0
5000
10000
15000US$ millions
2005-2008 2009-2012
Source: Gutman, Sy, and Chattopadhyay (2015).
9
PPI less prevalent in non-ICT sectors
21
40
31
12
0% 20% 40% 60% 80% 100%
All SectorsExcluding ICT
All Sectors
Count of Countries
Receiving PPI Not Receiving PPI
Source: Gutman, Sy, and Chattopadhyay (2015).
10
ODF still relevant (and growing)
0
2000
4000
6000
8000
10000
12000
14000US$ millions
World Bank AfDB OECD-DAC, EC
Source: Gutman, Sy, and Chattopadhyay (2015).
11
ODF particularly relevant in non-ICT
0
2000
4000
6000
8000
10000
12000
14000US$ millions
Energy Telecom Transport Water Supply & Sanitation
Source: Gutman, Sy, and Chattopadhyay (2015).
12
Chinese financing growing significantly
0
2000
4000
6000
8000
10000US$ millions
Energy Telecom Transport Water Supply & Sanitation
Source: Gutman, Sy, and Chattopadhyay (2015).
13
Chinese financing strong in transport and energy
34%
8%
53%
5%Energy
Telecom
Transport
Water Supply &Sanitation
Source: Gutman, Sy, and Chattopadhyay (2015).
14
Chinese financing shifting emphasis
0%
25%
50%
75%
100%
2005-2008 2009-2012
Average Resource Rich Average Non-Resource Rich
Source: Gutman, Sy, and Chattopadhyay (2015).
15
Chinese financing favouring stable economies
0%
25%
50%
75%
100%
2005-2008 2009-2012
Fragile Low Income Non-Fragile Low Income
Source: Gutman, Sy, and Chattopadhyay (2015).
16
Recent trends: Concerns
• Sub-national/urban infrastructure ignored (both in accessing needs and in financing)
• Emphasis on facilitating projects have ignored governance, coordination, and efficiency gains
• Complementarity in financing across sources, countries, sectors is purely serendipitous
• Traditional coordination mechanisms ill-suited in new economic environment with new and multiple stakeholders
17
Traditional financing matrix now in flux
Source: Gutman, Sy, and Chattopadhyay (2015).
Sectors Government ODF China PPIEnergy Telecommunication Transport Water
Transport Government ODF China PPI Airports Railroads Roads Seaports
18
Domestic fiscal space (Revenue/GDP)
0%
5%
10%
15%
20%
25%
30%
35%
Oil Exporting Countries Non-Oil Exporting Countries
Source: Gutman, Sy, and Chattopadhyay (2015).
19
Recommendations:
Build on existing institutional structures and functions, rather than invent new institutions
• Enhance collaboration and coordination across traditional and non-traditional sources of finance
• Regional guidance of investment practices for economic, social, environmental sustainability
• Extend opportunities for private investment
• Improve public financing support including sub-national/urban finance and investment
• Focus on broader sectoral governance reform opportunities