Infrastructure, Regional Integration and Growth in Africa

Reinikka that low capital accumulation, high price of investment goods, low productivity of investment and geographical disadvantages are indeed the set of challenges that slow African growth. It is true that investment in African countries is more expensive, 70 percent higher than for OECD or East Asia, and as a result Africa remains prone to losing 0.44 percent in average growth per annum. Geographical dis-advantages, which include land-lockedness and poor infrastructure, have led to higher transport costs for capital goods, which are largely imported. These factors have exacerbated the prices of investment goods. It is agreeable, on the one hand, that the competitiveness of African enterprises and trade in global markets, income distribution and welfare depend on infrastructure, while regional integration has the solutions to mitigating Africa’s geographical impediments, financing needs and growth on the other. Infrastructure quality is a dominant explanatory factor of manu-facturing performance and competitiveness. Infrastructure serves as a key component of the investment climate. Problems with roads, rail, ports, air transport, energy, telecommunications and other infrastructure are cited by the business community and African Finance Ministers as one of the chief constraints to economic growth in Africa. As much as 50 percent of the harvest is lost in many parts of Africa because farmers lack post harvest storage and are unable to get their goods to the market (Commission for Africa, 2005). To improve the quality of infrastructure, it is necessary to assess current and future priorities for infrastructur