Investment policy

Aid for investment in infrastructure in Africa

 

According to the World Bank USD 93 billion a year is needed for Sub-Saharan Africa’s infrastructure - two-thirds for investment in new physical infrastructure and a third for operations and maintenance of existing assets. However, only USD 45 billion is being mobilised.

 

The funding gap is assumed to be significant for North Africa as well. To fill the gap for the whole continent, substantial scaling up of resources is required, as well as institutional and policy reforms to strengthen the framework for infrastructure development.

However, resources from African governments, their citizens, and donors are not enough to respond to these needs. This is seen as an area where the private investment can make an important contribution but, for this to happen, a sound policy environment and financing instruments that facilitate investment must be in place. Official development finance can play a catalytic role in this regard by helping African governments to improve the enabling environment and by mitigating the risks to investors.

 

Released in May 2012,  (pdf) [ ], describes:

  • official development finance to Africa’s hard and soft infrastructure
  • the role of official agencies in supporting infrastructure through financial tools such as export credits, blending mechanisms, guarantees and investment funds 
  • the contribution of non-OECD financiers such as China  
  • how donors implement the Paris Declaration on Aid Effectiveness in their support for infrastructure
 

This report was prepared as part of the OECD’s Aid for Investment in Africa's Infrastructure project which aims to better understand how aid can leverage private investment in Africa’s infrastructure sectors. This project is a joint undertaking of the OECD's Investment and Development Assistance Committees, and implemented within the framework of the NEPAD-OECD Africa Investment Initiative.

 

Further reading:

NEPAD-UN-OECD Policy brief:  (PDF)
NEPAD-UN-OECD Policy brief:  (PDF)

 

See also:

OECD work on private sector participation in the water and sanitation sector

 

Links:

OECD Development Co-operation Directorate www.oecd.org/dac

NEPAD website www.nepad.org

African Development Bank www.afdb.org

 

 

 

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