World Bank urges infrastructure focus
LESOTHO and other Sub Saharan African countries’ efforts at poverty reduction and economic development are being hampered by low levels of public investment in infrastructure, the World Bank (WB) has found. The findings were made in the WB’s latest edition of the Africa’s Pulse publication which analyses trends in infrastructure quantity, quality and access. The report also explores the relationship between infrastructure growth and economic growth in the region; documents stylised facts on public investment in the region; and examines the quality of infrastructure spending. According to the report, economic growth in sub-Saharan Africa is seen rising to 2.6 percent this year and further to 3.2 percent in 2018 and 3.5 percent in 2019. “The upturn in economic activity is expected to continue in 2018-19, reflecting improvements in commodity prices, a pickup in global growth, and more supportive domestic conditions,” part of the report states. In addition, the report commends Sub-Saharan Africa for the great progress in telecommunications coverage in the past 25 years, expanding at a fast pace across both low- and middle-income countries. It also states that access to safe water has also increased, from 51% of the population in 1990 to 77% in 2015.
However, for all the achievements, the report notes that the sub-continent continues to experience vast and deeply ingrained challenges.
It states that public capital spending levels were too low to address the region’s infrastructure needs.
It says that annual public spending on infrastructure was 2 percent of GDP in 2009 to 2015.
“Roads accounted for two-thirds of overall infrastructure investments in the region,” the report states, adding, “Capital spending on electricity and water supply and sanitation each accounted for 15% of total capital expenditures”.
It further states that little progress had been made in per capita electricitygenerating capacity in over two decades and only 35% of the population in most countries had access to electricity, with rural access rates less than one-third of the urban ones.
Transport infrastructure was also said to be lagging behind with Sub-Saharan Africa being the only region in the world where road density has declined over the past 20 years.
“When analysing public spending in infrastructure, countries spend significantly less money than they actually allocate to projects. This reduces the execution of projects earmarked for investment each year, a clear sign of the inefficiencies pervasive in the sector.”
The report recommended that the countries should address inefficiencies that affected public and private investment in infrastructure, noting that this was the only way to ensure that such investments lived up to their potential as a strategic tool for poverty reduction and economic development.
“The growth benefits of closing SubSaharan Africa’s infrastructure quantity and quality gaps are potentially large. Catching up to the median of the rest of the developing world would increase growth in GDP per capita by 1.7 percentage points per year, and closing the gap relative to the best performers would lift this growth by 2.6 percentage points per year.
“Closing the gap in electricity–generating capacity yields the largest potential benefit, and substantial gains also arise from narrowing the gap in the length of the road network,” the report states.
Meanwhile, the government of Lesotho had proposed M2 billion during the 2016/17 financial year towards infrastructure development of which M1.2 billion was earmarked for the Ministry of Public Works and Transport to design, supervise and maintain public assets.
And the report suggests that a robust institutional and regulatory framework would be critical in attracting private investment for infrastructure projects.
“The impact of public investment on growth can be enhanced by implementing policies that foster the efficiency of public investment.
“For instance, improving the institutions and procedures governing project appraisal, selection, and monitoring can render considerable economic dividends.
“Evidence suggests that countries with sound public investment management systems tend to have lower but more efficient levels of public investment, crowd in more private investment, and exhibit higher growth rates,” the report states.
pUBliC Works and transport Minister tšoeu