Outline

• Motivation and objectives
• Literature review & contributions
• Empirical models
• Results
• Conclusions and Policy Implications

Outline

    A-->B;
    A-->C;
    B-->D;
    C-->D;

Literature

Infrastructure Quality Index

Ranking

• No African country in the top 20
• Highest ranked: – Rwanda (40), Seychelles (41), Morocco (42), Namibia (45), Mauritius (50)
• 14 African countries ranked in the bottom 20
• Source: reports.weforum.org/global-competitiveness-index-2017-2018/

Literature (cont’d.)

Infrastructure Quality Index

Electricity Issues

• Frequent power outages, restricting access to electricity to a third of Africa’s population, reducing its productivity by as much as 40%, and curtailing its annual economic growth by about 2% ( PIDA, 2014)
• Only 30% of African countries have access to electricity relative to 70%-90% of other developing countries

Motivation

Infrastructure & Growth

• Well-designed infrastructure investments (Energy, transport, digital communications, waste disposal networks, and water and sanitation facilities) have long-term economic benefits
  • Infrastructure raise productivity, decrease transportation and communication costs, increase land values, improve health
  • Cause significant positive spillovers.

Motivation (cont’d.)

Infrastructure & Growth

• However, investing wisely in infrastructure is critically important
  • Over-investment can lead to inefficiency and low marginal returns

Link between Infrastructure and Growth

• Channels through which infrastructure impacts growth
  • direct input into the production process
  • complement to other inputs into the production process
  • stimulant to factor accumulation by providing facilities for human development
  • tool to guide industrial policy ( Wolassa, 2012).

Outline

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