Infrastructure investment in Sub-Saharan Africa: Opportunities, risks and prospects for economic development
Mphigalale, Tshifhiwa Victor
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There is considerable theoretical and empirical research devoted to the study of infrastructure investment and development and how they relate to economic growth. There is also evidence in developed economies that their economies grew following infrastructure investment. The inference can be made that infrastructure investment plays a positive role in economic growth. Sub-Saharan Africa (SSA) is immensely well-endowed with natural resources yet is the poorest region in the world. Furthermore, SSA countries have similar experiences of public infrastructure investment, such as not having enough transportation infrastructure or the lack of an adequate power supply. Where public infrastructure exists in SSA can be described as ageing, decaying, inappropriate, incomplete or dysfunctional to some degree. The study conducted both qualitative and quantitative analyses to evaluate infrastructure investment in three SSA countries – Angola, Democratic Republic of Congo and Ghana – to determine what levels of investment, challenges and needs are currently experienced in private and public infrastructure investment in the region, particularly pertaining to transportation, energy and ICT infrastructure, and what factors may be influencing investors to avoid investing in SSA infrastructure. The research found that the DRC has the least infrastructure investment while Ghana is ahead of the three countries. The research also found that while Ghana is ahead of the three countries, its governance system is also better and is less corrupt compared to the other two economies with the DRC being at the bottom. As a result, infrastructure investment in SSA has fallen far behind its trading partners due to poor governance and corruption.