Power and Roads for Africa

Vijaya Ramachandran

03/31/2008

Central to the issue of growth is the development of the private sector.  Without the creation of jobs and businesses, there is no real chance for Africans to raise their standard of living.  Extensive surveys of private sector businesses carried out over the past decade show that the poor performance of the private sector can be largely attributed to the high costs of the business environment.  This essay by CGD senior fellow Vijaya Ramachandran looks at how the United States can help address two key constraints identified by these surveys: the lack of power and roads.  The U.S. can help solve the infrastructure crisis in Africa by creating a $1 billion Clean Energy Fund for Africa to facilitate the transfer of clean technology, including renewable energy, from the United States to Africa. It should encourage the African Development Bank to focus solely on regional infrastructure projects, in return for which the United States should increase its capital contribution to the organization by 25 percent per year for each of the next four years.  And it must ensure that the World Bank increases its allocation toward regional infrastructure projects in Africa, with a strong emphasis on clean technology, making this a central mission of its soft loan window.

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