Topic Guide: Regional infrastructure in Sub-Saharan Africa and South Asia:

Abstract

The development of infrastructure acts as an enabler for structural transformation, accelerating economic growth and reducing poverty. Regional infrastructure has the potential to deliver even greater benefits through the ability to support the development of regional markets, link production clusters with value chains and provide access to international trade. This is of particular importance in South Asia and Africa where the lack of regional infrastructure is acting as a constraint on economic growth. After the introductory chapter, Chapter 2 describes a range of regional experiences in infrastructure. The potential benefit from regional infrastructure integration in sub-Saharan Africa is high. The region includes 31 small countries with a GDP below USD10 billion and 15 landlocked countries. Intra-regional trade accounts for only 12% of total regional trade in Africa compared to 53% in emerging Asia. Regional integration can offer enlarged markets, leading to advantages in specialisation, economies of scale and increased competition. A reduction of 10% in transport costs for landlocked African countries would increase their volume of international trade by as much as 25%. In South Asia, regional infrastructure has the added potential for a ‘peace dividend’. Creating economic dependencies and shared interests from a platform of regional infrastructure can assist in the stabilisation of intra-regional relations. This is of particular value for fragile countries or countries which are on the cusp of becoming fragile. The rest of the Topic Guide (Chapters 3-5) is centred on the three key stages of regional infrastructure projects: planning, financing and implementation. In each stage, the challenges are significant. These include: planning: the need for coordination and governance of regional projects involving multiple stakeholders in one or more countries. Discussed in Chapter 3; financing: the need for large-scale and multi-year financing from multiple sources in both the public and private sectors where barriers to private-sector investments are high. Discussed in Chapter 4; implementation: the need for strong programme governance, which ensures integrity and efficiency and manages complex interdependencies within programmes. Discussed in Chapter 5. There is a range of cross-cutting issues around regional infrastructure that run through the Topic Guide: harmonisation of hard and soft infrastructure; logistics management across different countries; sharing of costs and benefits across different countries and stakeholders. This Topic Guide has been produced by the Overseas Development Institute for Evidence on Demand with the assistance of the UK Department for International Development (DFID) contracted through the Climate, Environment, Infrastructure and Livelihoods Professional Evidence and Applied Knowledge Services (CEIL PEAKS) programme, jointly managed by DAI (which incorporates HTSPE Limited) and IMC Worldwide Limited