Infrastructure Privatisation and Poverty Reduction in Africa

Despite the perceived role of efficient infrastructure as critical element for economic growth, poverty reduction and the attainment of the millennium development goals, there is clear evidence that the provision of infrastructure in Africa has been much below standard in terms of quantity and quality. Over the past decade, there has been a change in the perception of the roles of the public and private sectors in infrastructure development. This study evaluates the linkages between infrastructure reform and poverty reduction in Africa. The findings indicate that the results of a decade of regulatory reform, implementation of the privatization and liberalization agenda, combined with the influx of private investment in infrastructure have decidedly been mixed. In spite of modest achievements, especially in telecommunications, there has been a gap between popular perceptions and reality on ground. Africa's atypical experience and unique socioeconomic characteristics are such that the policy preconditions that are indispensable for effective liberalization and privatization are rarely met. Overall, infrastructure privatization has proceeded without adequate consideration being given to the needs of the poor. Even in telecommunications where privatization has improved national access to services through network expansion, weak regulation has had a negative impact on the poor through poor service quality and service cutbacks. There is now a significant base of experience around the world from which lessons can be learned. Infrastructure privatization should be viewed as a means to an end, and not an end in itself. The goal should be a more efficient sector delivering quality service while fulfilling its social responsibilities. Privatization is only an effective means towards the achievement of this goal if it is done in the context of an appropriate market and regulatory framework.