Africa - Aid or Roads?

WHETHER it is taking vegetables to market, getting water from a tap or turning on the lights, almost everything is slower, less reliable or more expensive in Africa than it needs to be. The African Development Bank (AfDB), which finances big investments on the continent, says that a shortage of roads, housing, water, sanitation and electricity reduces sub-Saharan Africa’s output by about 40%. There is no controversy in saying that shoddy infrastructure is holding the continent back.

But how to finance more of it? Some want to divert aid money. Suggesting that an engineering firm might make better use of charity than Oxfam or Save the Children sounded like heresy once. But the terms of the debate have shifted—for several reasons. The work of low-cost Asian companies (paid with revenues from African resources) has shown that new roads and ports can be affordable. There is also a new sense of urgency: as populations grow, the need for better infrastructure becomes even greater. Finally, the rise of African banks and stockmarkets has made public-private partnerships more feasible.

Some critics of the aid industry believe that its efforts should be limited to spending on primary schools in the poorest areas, medicines and mosquito nets for all, and a few key agricultural initiatives. But much education work has been labelled ineffective. A village in Tanzania with poor schooling may be better off getting a road than a teacher, critics say. Once local farmers can transport produce to market they will be able and willing to pay for schools—and to make sure they work.

But Africa needs more than rural roads. It needs entire new logistics networks linking airports, railways and warehouses—and new dams and electricity grids to power them. Meanwhile, Africa’s growing cities need better water supplies and sanitation. The World Bank points out that even relatively prosperous African cities, such as Lagos and Nairobi, are in worse shape than they were a decade ago. Violent crime has risen. Cholera and other diseases are back. City roads have crumbled.

The AfDB reckons that Africa can become a middle-income continent within a decade by spending some $90 billion a year on infrastructure. That is only 5% of the continent’s GDP (though double its current infrastructure spending, according to the AfDB).

Others are more sceptical. A generation ago, during a previous resource boom, African states set about building roads and railways. In few countries did this lead to prosperity. Lacking good governance—the focus of much modern aid work—corruption surged, as it often does with infrastructure projects. Donor countries also insisted on using favoured home contractors rather than local workers. Maintenance was routinely neglected. And glory-hungry politicians opted for useless prestige projects.