Public Investment Efficiency in Sub-Saharan African Countries

Barhoumi, Karim; Vu, Ha; Towfighian, Shirin Nikaein; Maino, Rodolfo

doi:10.5089/9781484360019.087

Cited by 15 publications

(27 citation statements)

References 13 publications

(11 reference statements)

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“…Fertility rates remain high with the failure to generate a decisive move out of low-productivity agriculture. This pessimism is matched by recent studies on the impact of infrastructure investment on growth due to quality problems associated with poor public management systems (Barhoumi et al, 2018). In turn these findings create pessimism about debt sustainability in many African countries and concern about the rising share of China in African debt stocks (IMF, 2018).…”

Section: Transformation Electrification and Demographymentioning

confidence: 95%

China’s Development Finance and African Infrastructure Development

Gu¹,

Carey²

2019

China-Africa and an Economic Transformation

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With its policy banks, China has become the largest source of official development finance in the world. This chapter examines the factors behind the significant increase in China’s ‘market share’ in African infrastructure development, and the issues and opportunities this presents for wider development cooperation in infrastructure sectors across Africa. The study addresses four questions: (i) Why has China been so competitive in this domain over the last two decades? (ii) How do China’s concepts, institutions, and policies differ from those of established sources of official development finance? (iii) What is the impact on development concepts, vocabulary, and practice at the level of the G20 and the multilateral development banks? and (iv) What is the impact on infrastructure development cooperation and finance in Africa? The study argues that Chinese entrepreneurialism in development finance has stirred up the established development finance system, generating constructive new rivalries alongside new cooperative learning opportunities.

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Section: Transformation Electrification and Demographymentioning

confidence: 95%

China’s Development Finance and African Infrastructure Development

Gu¹,

Carey²

2019

China-Africa and an Economic Transformation

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“…Barhoumi et al (2018) also show that quality of institutions is strongly correlated with estimated public efficiency levels. In particular, their results indicate that a 10 percent increase in the control of corruption index or the regulatory quality index could raise the efficiency of public investment in sub-Saharan African economies by about 12 percent.…”

mentioning

confidence: 74%

“…One practical approach would be to improve the efficiency of public sector investment spending. For example, in a recent study, Barhoumi et al (2018) have found that the sub-Saharan region lags behind its peers in terms of public sector investment efficiency. Specifically, the region's inefficiency score was estimated to be 54% based on physical infrastructure indicators; 20% using survey-based (business leaders' perception) indicators; and 36% based on hybrid indicators.…”

Section: Conclusion and Recommendationsmentioning

confidence: 99%

Re-Examining Public Debt and Current Account Dynamics in Ethiopia: SVAR Evidence

Melesse

2020

Preprint

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Public debt management is now an integral part of overall macroeconomic management in many developing and emerging market economies. Preventing unsustainable debt accumulation and maintaining healthy fiscal profile begins with understanding its key drivers both in the short- and in the long run. This study applies structural vector auto-regressive (SVAR) model on annual time series data to study general government debt and current account dynamics in Ethiopia for the period 1980–2018. Both the impulse response and forecast error variance decomposition results confirm that fiscal balance exerts the strongest influence on both government debt and current account balance in the short run. In addition, own shock as well as shocks stemming from gross fixed capital formation and growth have significant effects on general government debt. The findings were robust to alternative data transformation, differing Choleski ordering of the model variables, and inclusion of exogenous deterministic terms that capture changes in the political landscape.JEL classification: E60, E63, C32, H63

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“…More detailed budget-level data indicate that there is some exaggeration in the public investment figures, as countries in SSA tend to underspend allocated budgets, but even these resources confirm that a considerable portion of investments are financed by domestic budgets. [16]) Creditor Reporting System, https://stats.oecd.org/Index.aspx?DataSetCode=CRS1; World Bank (2019 [17]), Private Participation in Infrastructure (PPI) database, https://ppi.worldbank.org/en/ppidata; AidData (2017 [18]), Global Chinese Official Finance database, https://www.aiddata.org/data/chinese-global-official-finance-dataset; International Monetary Fund (2017 [19]), Investment and Capital Stock Dataset, https://www.imf.org/external/np/fad/publicinvestment/#5.…”

Section: Domestic Finance Is the Dominant Source Of Infrastructure Financementioning

confidence: 99%

Sustainably financing infrastructure in sub-Saharan Africa - What role for the DAC?

2021

OECD Development Policy Papers

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In a climate of heightened debt vulnerabilities, countries in sub-Saharan Africa struggle to fill the gap in infrastructure finance, which is paramount to achieving their sustainable development objectives. At the same time, the infrastructure financing landscape in the region has become increasingly diverse and challenging to navigate. This paper reviews the role of Development Assistance Committee (DAC) members in supporting countries to address mounting infrastructure needs while avoiding and mitigating potential debt crises.The first part of the paper provides an overview of the infrastructure needs in sub-Saharan Africa. The second part presents the changes in infrastructure financing, highlighting the dominant roles of domestic government and non-DAC lenders. The third part explains how infrastructure finance can be a potential driver for the debt build-up in the region; but that the quality of spending and the diversity of financing providers can be mitigating factors. The fourth part includes policy recommendations for DAC members.

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Public Investment Efficiency in Sub-Saharan African Countries

Cited by 15 publications

References 13 publications

China’s Development Finance and African Infrastructure Development

China’s Development Finance and African Infrastructure Development

Re-Examining Public Debt and Current Account Dynamics in Ethiopia: SVAR Evidence

Sustainably financing infrastructure in sub-Saharan Africa - What role for the DAC?

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