Aid and Infrastructure Financing: Emerging Challenges with a Focus on Africa

Posted: 16 Nov 2014

Date Written: November 14, 2014

Abstract

The central argument of this study is that given the magnitude of the investment in infrastructure that is required, especially in Africa, the role of foreign aid in the future should be distinctly different. While aid will be required to continue to fill the ‘savings gap’ in some small countries and land-locked countries, in most other countries aid can play a very different role in facilitating the creation of institutional mechanisms that help mobilize more funding from other sources. These include domestic revenues (which already fund a large proportion of infrastructure), investments by China and the other ‘BRICs’, sovereign wealth funds and infrastructure funds. There are already examples of aid playing such a leveraging role. What is needed is to take this to a new and higher level. The study provides an overview of evidence on infrastructure needs and also possible magnitudes of flows from different sources for investment in infrastructure.

Keywords: aid, infrastructure, Africa, finance, funds, private sector

JEL Classification: F35, L9, N20, O16

Suggested Citation

Addison, Tony, Aid and Infrastructure Financing: Emerging Challenges with a Focus on Africa (November 14, 2014). Available at SSRN: https://ssrn.com/abstract=2524546

Tony Addison (Contact Author)

United Nations University ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
293
PlumX Metrics