Africa’s Growth Puzzle: Better Ways to Fill Infrastructure Gaps
IMF Blog, February 28, 2012
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Bibliographic details
- Published: February 28, 2012
Overview
- Publication date: February 28, 2012.
- Framing: Reviving or maintaining economic growth is a foremost concern for policymakers globally; required policies differ by region and country.
- Central message: For many countries in Africa, weak infrastructure is an obstacle to raising growth.
Infrastructure challenges
- Described as a “tremendous infrastructure deficit” that:
- “affects all levels of society and all aspects.”
- “affects health, education and growth.”
- Policy tradeoffs: Infrastructure needs compete with other pressing spending priorities, for example:
- “the need for infrastructure development, but we could be talking about how incredibly important it is to spend on AIDS, health, education, or any number of things.”
Financing options and recommendations
- Suggested approach: Step up investment in infrastructure by augmenting traditional sources of financing (such as aid) with:
- foreign borrowing, and
- private investment.
- Caution: Tapping alternative sources of financing is “not a cure all.”
Risks and policy considerations
- Key cautionary point: Additional borrowing must be managed to ensure that:
- it can be repaid, and
- infrastructure investment translates into growth.
- The interview discusses the pros and cons of foreign borrowing for infrastructure investment and the risks that need to be managed.
Additional content format
- The page references a full interview with Andrew Berg of the IMF’s Research Department and provides an audio option: “Listen to the interview here.”
Source: Africa’s Growth Puzzle: Better Ways to Fill Infrastructure Gaps (February 28, 2012).