1. The Infrastructure-Industrialization Nexus
ECA
The Infrastructure-Industrialization Nexus
Dr. Stephen Karingi, Director
Sunday 26 March 2017
Dakar, Senegal
REGIONAL MEETING ON “INNOVATIONS IN INFRASTRUCTURE DEVELOPMENT AND SUSTAINABLE INDUSTRIALIZATION”

2. CONTENT Nexus between Infrastructure development and Industrialization
ECA
CONTENT
Nexus between Infrastructure development and Industrialization
State of infrastructure development in Africa
Infrastructure development and Industrializing efforts in Africa : evidence and selected issues for discussions
The Infrastructure-Industrialization Nexus

3. Nexus between Infrastructure development and Industrialization : theoretical framework
ECA
Infrastructure assets (e.g: energy, water) as inputs for industrial sector (manufacturers)
Infrastructure services (transportation incl. shipping, ICTs) purchased by industries
Direct
Efficiency gains from economies of scale and scope (e.g. improved regional integration)
Better access to, or efficient use of technology
Contribution to FDI inflows – attractiveness
Improved education and health of workers
Indirect
Infrastructure
(Economic)
Industrialization
Industrial development : catalyst of infrastructure investments (infrastructure demand by industries)
UNECA.ORG

4. State of infrastructure development in Africa
ECA
Despite the important role infrastructure assets can play to leverage industrial potential, Africa still faces serious infrastructure shortcomings, both in terms of access and quality;
Poor state of transportation network
low road and railways densities;
Significant portion of roads are unpaved/hardly passable during rainy seasons;
Single lines railways with very limited interconnections;
Power needed to scale industrial plants is grossly inadequate
Access to ICTs still a big issue for many countries
Title of the presentation goes here | Sub-Title goes here
UNECA.ORG

5. State of infrastructure development in Africa
Transportation network
ECA
Africa’s poor transportation network materialized e.g. by low railway density compared to other developing regions
Railway Network and comparative densities in selected regions, 2014
Regions
Total network (km)
Density
(km/1 000 km2)
East Asia & Pacific
5.1
Middle East & North Africa
32046
2.8
South Asia (IDA & IBRD)
77897
15.2
World
7.9
Rest of Africa
59634
2.5
South Asia
Latin America & Caribbean
102460
5.0
UNECA.ORG
Source: Based on data from World Bank, WDI

6. State of infrastructure development in Africa :
Access to energy
ECA
Energy : Africa lags behind due to limited energy production and … also faces skewed distribution in terms of energy generation capacity
UNECA.ORG
Source: Based on data from World Bank, WDI
Source: Based on data from BP Statistical Review of World Energy, 2016

7. State of infrastructure development in Africa :
ICTs performance
ECA
… digitalization: still a long way to go for Africa!!!
ICT Development Index 2016, African countries in the global top 100
countries
Value of the Index in 2016
Ranks in Africa
Ranks in the world
Mauritius
5.55 1 73
Seychelles
5.03 2 87
South Africa 3 95
Tunisia
4.83 4 96
Morocco
4.6 5 98
Cape Verde 6 97
Egypt
4.44 7
100
Access sub-index: This sub-index captures ICT readiness, and includes five infrastructure and access indicators (fixed-telephone subscriptions, mobile-cellular telephone subscriptions, international Internet bandwidth per Internet user, households with a computer, and households with Internet access).
Use sub-index: This sub-index captures ICT intensity, and includes three intensity and usage indicators (individuals using the Internet, fixed broadband subscriptions, and mobile-broadband subscriptions).
Skills sub-index: This sub-index seeks to capture capabilities or skills which are important for ICTs. It includes three proxy indicators (adult literacy, gross secondary enrolment, and gross tertiary enrolment). As these are proxy indicators, rather than indicators directly measuring ICT-related skills, the skills sub-index is given less weight in the computation of the IDI than the other two sub-indices.
Source: Based on ITUdata
Source: Based on ITUdata
UNECA.ORG
Note : The Index considers 3 dimensions including ICT access, ICT use and ICT skills.
See and

8. Industrial development : where does Africa stand ?
ECA
… De-industrialization of Africa and other developing regions
De-industrialization : frustrating for poor countries! %
Source: Based on data from World Bank, WDI

9. ECA … Infrastructure and industrialization nexus in Africa :
an evidence - positive correlation
ECA
Two-way illustrations between the level of manufacturing value added and selected infrastructure variables
Title of the presentation goes here | Sub-Title goes here
UNECA.ORG
Note : Based on an ECA ongoing study. Data from 41 African countries over the period
The figures show scatterplots with the fitted lines obtained by a naïve OLS regression, with a 95% confidence interval.

10. Infrastructure development and Industrializing efforts in Africa :
Some key issues
ECA
Infrastructure funding in Africa 2015, percentage by source
1. Mobilizing financial resources for infrastructure projects and industrializing efforts
Increase participation of the private sector in infrastructure projects – PPPs (?) (Private sector : 9% of infrastructure projects in 2015)
Developing, strengthening and deepening financial markets;
Channeling remittances to infrastructure projects
Overhaul fiscal policies to optimize government revenues;
Source : The Infrastructure consortium for Africa. Abidjan. Online available at

11. ECA 2. Supporting African SMEs
Infrastructure development and Industrializing efforts in Africa :
Some key issues
ECA
2. Supporting African SMEs
SMEs growth : critical for inclusive and sustainable development
Enabling environment for starts up to grow
Urban centres designed to support SMEs
SME should not be a permanent state (SMEs are to growth…)
Move SMEs away from informal economy to unlock their industrial potential
Creation of level playing field between SMEs and big enterprises
3. Value chain maximization and regional integration
Pursuing infrastructure development on regional scale :
Cost effective
Provide opportunities to for industrialists to access larger markets
Regional waterways and rail networks : “green” infrastructure for industrial development
Increasing cost efficiency and competitiveness
Development of supportive policies (industrial and infrastructure policies) critical just as their Implementation and coordination at national, regional and international levels.

12. more info: www.uneca.org
THANK YOU!
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