Accelerating Reform in Africa: Mobilising Investment in Infrastructure and Agriculture PRELIMINARY FINDINGS ON DONOR SUPPORT TO AFRICA’S INFRASTRUCTURE

The document has been developed by the NEPAD-OECD Africa Investment Initiative and the OECD Development Cooperation Directorate. The views contained within do not necessarily represent those of NEPAD, the OECD or their member governments. The document is NOT FOR QUOTATION OR CIRCULATION. This report broadly maps donor support to both physical infrastructure and the enabling environment for infrastructure investment in Africa. It builds on the extensive analysis carried out by the Africa Infrastructure Country Diagnostic (AICD), which examines the state of Africa's infrastructure. The report is a preliminary version of one of the outputs of the OECD programme on Aid for Investment in Infrastructure, analysing the role of donors in supporting the enabling environment to enhance private investment for Africa's infrastructure. Infrastructure includes the sub-sectors of water and sanitation, transport and storage, information and communication technology, and energy. It includes physical aspects as well as soft aspects such as policy and administrative management or training in the respective sub-sectors. The report first examines the volume and distribution of Official Development Assistance (ODA) to the sector and region by multilateral and bilateral donors that report to the Development Assistance Committee (DAC). While so-called ‗Other Official Flows' such as non-concessional loans also play an important role, these flows are not examined at this time due to incomplete reporting. The report then addresses the qualitative aspects of support to Africa's infrastructure, mainly focusing on the approaches and activities of mostly bilateral donors. 1. Infrastructure development is key to economic growth and poverty reduction in Africa. Therefore, Africa's infrastructure needs call for a substantial scale-up in financing, particularly through increased private investment. Of the current total spending for Africa's infrastructure, the share of Official Development Assistance (ODA) is relatively small, although the amount is increasing rapidly. Among donors, the multilateral organisations adminster roughly 70% of the ODA, with the rest being divided up into small portions from over 24 bilateral donors. 2. Not many bilateral donors have an overall strategy to support Africa's infrastructure, including regional infrastructure. This may be explained by the fact that many bilateral donors provide their support by funding various multiateral organisations and facilities. Nevertheless, donors are actually undertaking important activities for developing Africa's infrastructure. In particular, they acknowledge the importance of improving the enabling environment—i.e. relevant policies, regulations, and institutions that form the framework conditions for infrastructure development —especially to attract private investment to fill the financing gap. Therefore, …