Essays

People and Places: Can They Align to Bring Growth to Africa?

9/22/10
Peter Heller
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Since the global financial crisis hit in the fall of 2008, talk of new infrastructure projects has abounded, principally because investment in infrastructure is seen as a potent way to provide a fiscal stimulus to economies in recession. From Washington, D.C., to China and other industrial countries, ambitious infrastructure investment programs are being launched to create jobs and restore growth. This is not a new phenomenon. Over the last decade, low- and middle-income countries, particularly in Latin America and sub-Saharan Africa, have recognized the importance of infrastructure for achieving rapid rates of economic growth.

The literature has largely focused on identifying the types of infrastructure that are the best means for achieving economic growth and on the modalities for financing such investments. The debate has thus neglected the importance for policymakers of considering the impact of demographic factors in shaping the agenda for infrastructure investments.

This essay explores what is meant by infrastructure and the factors that affect investment choices, with a particular focus on demographics. Using demographic projections data, it discusses population trends that policymakers should consider as they make choices about infrastructure investment and how these weigh relative to other considerations. The main message is, simply, that demographics matter. Countries with growing populations must be prepared to provide a basic network of water, sanitation and social services and to respond to shifts in the population, particularly the rising number of individuals of working age.

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