A major factor hindering infrastructure implementation and delivery is the absence of good governance, according to the 130 delegates from 27 countries who came together for the first Regional Roundtable on Infrastructure Governance in Cape Town in November.
There’s no denying infrastructure is crucial to Africa’s growth prospects. Nor can one ignore the ever-growing need for infrastructure on the continent—in Sub-Saharan Africa, only 35% of the population has access to electricity, and 23% still lack access to safe water and sanitation. Despite an estimated shortfall of nearly $100 billion in infrastructure investment in Africa, lack of financing is not the biggest problem.
The landmark Roundtable brought together representatives from African governments, the global private sector, multilateral and international organizations, civil society organizations and other development partners, for a discussion on the challenges and practical solutions to the governance impeding successful infrastructure delivery in Africa.
Download the January 2018 Global Economic Prospects report.
Global trade regained significant momentum, supported by an upturn in investment.
As headwinds ease for commodity exporters, growth across emerging and developing economies is expected to pick up. However, risks to the outlook remain titled to the downside, such as the possibility of disorderly financial market adjustment or rising geopolitical tensions.
A major concern in the subdued pace of potential growth across emerging market and developing economies, which is expected to further decline in the next decade. Structural reforms will be essential to stem this decline, and counter the negative effects of any future crisis that could materialize.
The broad-based recovery should continue
Global growth accelerated markedly in 2017, supported by a broad-based recovery across advanced economies and emerging market and developing economies (EMDEs), and it is expected to edge up in 2018.
Agriculture prices declined marginally, as a 5 percent decline in beverages, led by cocoa (down 10 percent) outweighed a 2 percent increase in raw materials prices, led by cotton (up 6 percent) and natural rubber (up 5 percent). Fertilizer prices declined 5 percent, led by a 11 percent drop in urea.
Metals and mineral prices gained less than 1 percent. A large gain in iron ore (up 12 percent) was offset by declines in zinc and nickel. Precious metals prices declined 2 percent, led by a 1 percent decline in gold.
The pink sheet is a monthly report that monitors commodity price movements.
Climate change poses a significant threat to the economic development of countries around the world. – in part due to a combination of higher agricultural prices and threats to food security and health – especially in the poorer parts of the world. The Paris Agreement and the 2030 Sustainable Development Goals (SDGs) have provided commitments to tackle the most urgent of these environmental challenges.
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The Argentinian presidency of the G20 opens this month and will be marked by a focus on infrastructure investment. The G20 and Organisation for Economic Co-operation and Development (OECD) have already announced a widescale data collection initiative to create benchmarks to monitor the risk-adjusted financial performance of private infrastructure debt and equity investments.
It’s about time.
Investors have hit a roadblock when investing in infrastructure. Until now, none of the metrics needed by investors were documented in a robust manner, if at all, for privately held infrastructure equity or debt. This has left investors frustrated and wary. In a 2016 survey of major asset owners by the EDHEC Infrastructure Institute (EDHECinfra) and the Global Infrastructure Hub, more than half declared they did not trust the valuations reported by infrastructure asset managers. How, under such conditions, can the vast increases in long-term investment in infrastructure by institutional players envisaged by the G20 take place?
Since the presentation of the World Bank’s first Africa Climate Business Plan at the COP 21 in Paris in 2015 and the Transport Chapter in Marrakech in 2016, a lot of progress has been made on integrating climate adaptation and mitigation into our transport projects.
The World Bank initially committed about $3.2 billion toward mainstreaming climate action into transport programs in Sub-Saharan Africa in the form of infrastructure investments and technical assistance. Following the Paris Agreement, and building on African countries’ Nationally Determined Contributions (NDCs), the size of this portfolio grew to $5 billion for 2016 to 2020. In 2017, the institution added another $1.9 billion to that amount, bringing the total to $6.9 billion in projects with climate co-benefits— more than twice the size of the original portfolio. These investments will help improve the resilience of transport infrastructure to climate change and improve the carbon footprint of transport systems.
Climate change has already started to affect African countries’ efforts to provide better transport services to their citizens. African transport systems are vulnerable to multiple types of climate impact: sea level rise and storm surge, higher frequency and intensity of extreme wind and storm events, increased precipitation intensity, extreme heat and fire hazard, overall warming, and change in average precipitation patterns. The increased frequency and intensity of extreme climate event challenges the year-round availability of critical transport services: roads are damaged more often or are more costly to maintain; expensive infrastructure assets such as ports, railways or airports can be damaged by storms and storm surges, resulting in a short life cycle and capacity than they were originally designed for. Critical infrastructure such as bridges continue to be built based on data and disaster risk patterns from decades ago, ignoring the current trend of increased climate risk. For Sub-Saharan Africa alone, it is estimated that climate change will threaten to increase road maintenance costs by 270% if no action is taken.
- urban transport
- disaster risk management
- Sustainable Development
- climate-smart transport
- climate change mitigation
- climate change adaptation
- Resilient Transport
- sustainable mobility
- Sustainable Communities
- Urban Development
- Social Development
- Public Sector and Governance
- Agriculture and Rural Development
- Climate Change
- Central African Republic
A new project combining skills across the World Bank Group and IFC is taking advantage of disruptive advances in the energy and finance sectors to address these longstanding challenges for SMEs.
Current access to electricity remains woefully low and is a major impediment to economic growth. More than half of Africa’s population isn’t connected to the energy grid and has no access to reliable power. At the same time, fewer than 50% of adults have an account with a formal financial institution.
In recent years, however, two important developments have made it possible to begin addressing these challenges:
- Off-grid energy solutions—notably solar power—have fallen dramatically in price with new business models working to scale them
- New digital-based financing mechanisms, such as crowdfunding, cryptocurrencies, peer-to-peer lending, psychometric testing, big data, and blockchain have emerged as tools for under-served finance markets.
There are strong parallels in these advances for both sectors. Whereas both energy and finance are traditionally provided by large-scale, centralized service providers—state-owned electricity utilities and large commercial banks, respectively—new solutions have effectively decentralized and democratized the provision of these services. Now a range of smaller,
Photo: auphoto / Shutterstock.com
As Washington, D.C.’s infrastructure braces for its first winter freeze and 2017 draws to a close, this feels like the right moment for a recap on what the year has brought us in terms of closing the infrastructure gap across emerging markets and developing economies; policy directions within and outside of the World Bank Group; new instruments, tools, and resources; and—the proof in the pudding—actual investment levels.
There may not be one blog that can capture all of those themes in detail, but here is a brief overview of what 2017 has meant and what is on the docket for 2018 and beyond.
For years, the transport sector has been looking at solutions to reduce its carbon footprint. A wide range of stakeholders has taken part in the public debate on transport and climate change, yet one mode has remained largely absent from the conversation: maritime transport.
Tackling emissions from the shipping industry is just as critical as it is for other modes of transport. First, international maritime transport accounts for the lion’s share of global freight transport: ships carry around 80% of the volume of all world trade and 70% of its value. In addition, although shipping is considered the most energy-efficient mode of transport, it still uses huge amounts of so-called bunker fuels, a byproduct of crude oil refining that takes a heavy toll on the environment.
Several key global players are now calling on the maritime sector to challenge the status quo and limit its climate impact. From our perspective, we see at least three major reasons that can explain why emissions from maritime transport are becoming a global priority.
When we talk about the future of work, it is important to include perspectives, ideas and solutions from young people as they are the driving force that can shape the future. As we saw at the recent Youth Summit 2017, the younger, digitally-savvy generations —whether they are called Millennials, Gen Y, or Gen Z— shared solutions that helped tackle global challenges. The two-day event welcomed young people to discuss how to leverage technology and innovation for development impact. In this post, we interviewed —under a job-creation perspective—finalists of the summit's global competition.
- private sectors
- Social Entrepreneurship
- Youth Summit
- Agriculture and Rural Development
- Labor and Social Protection
- Information and Communication Technologies
- Global Economy
- Financial Sector
- Climate Change
- Latin America & Caribbean
- South Asia
- East Asia and Pacific
- South Africa