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For low-income countries, the absence of reliable infrastructure—roads, railways, ports, but also power supply—has become an increasingly binding constraint on growth. And we know that investment in infrastructure can raise productivity, boost growth, and help reduce poverty. But as straightforward as it sounds, getting investment decisions right is no easy feat.
For starters, low-income countries have massive investment needs. The World Bank has estimated that, in sub-Saharan Africa alone, the total financing need is around $93 billion per year. And one third of this still unfunded.
Even when financing is available, there’s a raft of other issues to tackle. What investments offer the biggest boost to growth? How much investment is needed and by whom? How to finance this investment without taking on too much debt? (more…)
Filed under: Economic Crisis, LICs, Low-income countries, Public debt | Tagged: capacity building, debt sustainability, enabling environment, global economic crisis, growth potential, infrastructure, investment strategies, low-income countries, private investment, sustainable investment | 7 Comments »