Local sources of financing for infrastructure in Africa : a cross-country analysis

This paper draws on a comprehensive new database constructed for the purpose of this research. It takes a comprehensive inventory of local sources of infrastructure financing in the 24 countries of Sub-Saharan Africa included in the first phase of the Africa Infrastructure Country Diagnostic. This inventory will provide a baseline against which further developments may be gauged. The study aims to identify and analyze, insofar as possible, factors contributing to the variance in the ability of national financial sectors to generate local financing for infrastructure projects. It attempts to analyze the potential for generating infrastructure financing by specific infrastructure sectors (electricity generation, transport, water and sanitation, and telecommunications), where it has been possible to compile these specific data. It proposes general policy recommendations for strengthening local capacity to mobilize financing for infrastructure. The paper concludes that further development and more appropriate regulation of local institutional investors would help them realize their potential as financing sources, for which they are better suited than local banks because their liabilities would better match the longer terms of infrastructure projects.