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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”. ECA. CONTENT.

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The Infrastructure-Industrialization Nexus

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  1. 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. 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 WWW.UNECA.ORG

  3. Industrialization Industrial development : catalyst of infrastructure investments (infrastructure demand by industries) Infrastructure (Economic) ECA Nexus between Infrastructure development and Industrialization : theoretical framework 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 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 Source: Based on ITUdata UNECA.ORG Source: Based on ITUdata Note : The Index considers 3 dimensions including ICT access, ICT use and ICT skills. See http://www.itu.int/en/ITU-D/Statistics/Pages/publications/mis2015/methodology.aspx and http://www.itu.int/net4/ITU-D/idi/2016/

  8. ECA Industrial development : where does Africa stand ? … 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 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 1995 -2015. 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 https://www.icafrica.org/fileadmin/documents/Annual_Reports/ICA_2015_annual_report.pdf

  11. ECA Infrastructure development and Industrializing efforts in Africa : Some key issues • 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. ECA THANK YOU! more info: www.uneca.org

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