The PPI Database’s 2014 full year update for these sectors has just been released, and it confirms the trends we began tracking for the first six months. Total investment in infrastructure commitments for projects with private participation in the energy, transport, and water and sanitation sectors increased six percent to $107.5 billion in 2014 from levels in the previous year. The total for 2014 is 91 percent of the five-year average for the period 2009-13, which is the fourth-highest level of investment commitment recorded – exceeded only by levels seen from 2010 through 2012.
This increase over 2013 was driven largely by activity in Brazil. Without Brazil, total investment commitments would have fallen by 18 percent, from $77.2 billion in 2013 to $63.4 billion in 2014. Although this is lower than H1 2014 (57%), Brazil’s large stake is a continuation of a recent trend.
The Latin America and the Caribbean (LAC) region saw $69 billion of investment commitments, or nearly 70 percent of the total for 2014. Three of the top five countries by investment commitments in 2014 were from LAC. The top five, in order, were Brazil, Turkey, Peru, Colombia, and India.
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When I was a child I lived in two worlds. The first world was a creative one, filled with music, a teeming treasure of sounds that stretched from church to nature. It included thunderous organ chords, melodious tube fiddles, and raspy frog choruses, to name a few. The other world I inhabited was more sober in nature, marked with political instability, hardships, and poverty. These two worlds came together in a loud cacophony that is my home country, Uganda.
However, the statistical foundations of Africa’s economic growth and poverty reduction narratives are increasingly being questioned. Shantayanan Devarajan, the World Bank’s former Chief Economist for the Africa Region, spoke of “Africa’s statistical tragedy” (after its growth tragedy of the 1990s), while Morten Jerven drew our attention to the challenges Africa faces in producing reliable national accounts.
When it comes to agriculture, the problems only multiply, with maize yield estimates, for example, varying substantially depending on the data source (by about 1 ton per ha between 1.7 and 2.6 ton/ha in Malawi in 2006/7). Clearly, tracking progress, even on some of the most elementary statistics for agricultural policymaking, is a challenge. So, what about the reliability of our common wisdom and policy direction which is often supported by references to the type of statistical factoids quoted above? Are we flying blind or vision impaired?
Poaching African elephants for ivory provides a case in point. Elephant poaching has sharply increased since 2006. We may now be losing up to 50,000 elephants per year with only 450,000 elephants remaining in Africa. In short, we are running out of time and unless we can stop the killing, we will surely lose the battle. Decreasing demand for ivory is vital over the long term, but the scale of current elephant losses makes this strategy too slow to save elephants by itself. The ecological, economic and security consequences from the loss of this keystone species will be quite severe and potentially irreversible.
Over the past twenty years, Sub-Saharan Africa has grown at an impressive rate, roughly 4.3% per year. Growth may slow to 4% in 2015, but then moderately pick up in 2016. Poverty has been falling from 57% to 48% between 1990 and 2010, although there is still much room for improvement. Despite this, conflict and subsequent fragility have been an ongoing thorn in the side of African development. In 2014 alone there were more than 4,500 clashes between armed groups and more than 4,000 instances of armed violence against civilians. Even in the absence of active conflicts, many countries carry the scars of violent struggles from the past as they seek to grow.
What causes conflict? How can conflicts be effectively avoided and interrupted? How does conflict affect trade, education, health, and infrastructure? What is the role of the state and of international partners in all this?
Why is Senegal’s Dakar-Diamniadio toll road, which opened on time and on budget in August 2013, so successful? The road has dramatically improved urban mobility around Dakar, reducing commute times between the city and its suburbs from two hours to less than 30 minutes.
Building on this positive experience, in 2014 the Government of Senegal awarded a further concession to extend the motorway to connect it to Dakar’s new Blaise Diagne International Airport. Excluding South Africa, this is the first greenfield road PPP in sub-Saharan Africa. What lessons can we draw?
- Political commitment. The Government of Senegal set the project as a priority. The first driver on the road was the President – who paid the toll. But commitment alone isn’t enough; it needs to be turned into action by government agencies. An intra-agency coordinating committee was set up. The National Agency for the Promotion of Investments (APIX) oversaw the preparation of the concession. The Public Private Infrastructure Advisory Facility (PPIAF) supported APIX with technical assistance, including the design of a framework for the oversight of the project.
- Consensus-building and stakeholder engagement. Part of PPIAF’s US$250,000 grant to the Government of Senegal helped to pay for seminars with stakeholder groups to discuss structuring options for the road and socio-economic drivers of the willingness to pay. The final structure chosen involved a relatively low toll, with an upfront contribution by the government to the cost, with the concessionaire taking full construction, operating and traffic risk. The combination of careful outreach to stakeholders, a fairly low toll, significant time savings and a well-maintained road meant that the first toll road in the country was accepted by the population. In addition, the fact that there is a free alternative road helped the Government and other stakeholders point out that motorists could always choose to use the other route.
- Experienced concessionaire with strong commitment to Senegal. The concessionaire, the Eiffage Group is one of Europe’s leading construction and toll road operating companies, with a long history of involvement in, and commitment to, Senegal. Eiffage, through the special purpose company set up to construct and operate for 30 years the road, SENAC S.A., ensured that the road was constructed and is being operated to a high standard, on time and within budget.
Nigeria has posted good growth numbers in recent years, but these have not translated into jobs. The government is aware of this challenge and has undertaken steps to improve the condition necessary for employment to improve. Key to this is the development of a downstream manufacturing capacity, benefitting from the country’s strong position in oil and gas. Professor Olu Ajakiye discusses the outlook for the country’s jobs market and the challenges it faces.
The World Bank, in collaboration with our partners at the Rockefeller Foundation, recently met with government agencies and other key stakeholders, as well as the online work community in Kenya and Nigeria, to discuss these issues. Online workers from these countries also presented their stories, including the highly inspirational story of Elizabeth, a retiree who was able to take in an orphan and provide for her schooling, as well as afford a lifestyle upgrade because of her online outsourcing work.
Elizabeth, 55, originally worked as a stenographer. Her husband died in 2003, and she is the sole breadwinner for three of her own children and one other orphan who she has informally adopted. She works online on writing platforms, and is currently being on- boarded to start work with CloudFactory. At the moment, she earns between US$50–80 per week working online; this is her the sole source of income, from which she pays her family’s rent, living expenses and short-term loans.
“I lost my husband in 2003, so I am the mother and the father," Elizabeth says. "I am self-sufficient. Online work does not confine me to an 8-5 time frame. I can work at my convenience, and I can manage my own home while I work.”
Online outsourcing (OO) is providing this kind of flexibilty and earning potential to millions of people around the world. OO generally refers to the contracting of third-party workers and providers (often overseas) to supply services or perform tasks via Internet-based marketplaces or platforms. Popular platforms include Elance-oDesk (now known as Upwork), Freelancer.com, CrowdFlower and Amazon Mechnical Turk. The industry’s global market size is projected to grow to US$15-25 billion by the year 2020, and could employ at least 30 million active workers from all over the world.
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