‘Policy consistency key for infrastructure development’

Lazarus Sauti

Infrastructure development is a major determinant of economic development, and direct investment on infrastructure not only creates production facilities which stimulate economic activities, but reduces trade costs and improves competitiveness.

Economist Vince Musewe says direct investment on infrastructure also provides employment opportunities and alleviates poverty.

“Infrastructure development involves fundamental structures that are required for the functioning of a community and society,” he said.

The fundamental structures take in roads, water supply, sewers, electrical grids, telecommunications and renewable energy, among others.

Policy expert, Paul Nyoni, however, says lack of infrastructure affects productivity and raises production and transaction costs, which hinders growth by reducing the competitiveness of businesses and the ability of governments to pursue economic and social development policies.

He added that the lack of infrastructure in Zimbabwe as well as other African countries is widely recognised.

Nyoni blames policy inconsistency and lack of clarity for this.

“Policy inconsistency and lack of clarity continues to scare off potential investors. In most, if not all African countries, policies change as soon as new minister comes in.

“This means that the investor might lose out when the new minister removes a policy that had to do with their investments,” he said.

Nyoni, therefore, urged African governments to ensure policy consistency and clarity in order to attract foreign investment and boost infrastructure development.

“Infrastructure development must be supported by policies. These policies must be clear cut, straightforward and backed by legislation,” he said, adding that clear cut policies give no room for corruption, a cancer that halts social and economic transformation.

African Development Bank (AfDB) vice president, Solomon Asamoah, says policy consistency is key in infrastructure development and African governments have to maintain policies regardless of change in leadership.

Speaking at the closing press conference of the Programme for Infrastructure Development in Africa (PIDA) - a 30-year strategy by the New Partnership for Africa’s Development (NEPAD), the African Union (AU) and African Development Bank, focusing on regional trans-boundary projects – in Abidjan, Ivory Coast recently, Asamoah added that African governments must do their part in infrastructure development and try to involve the private sector by looking at their needs.

“One of the most important thing, we always try to put across is policy consistency, there is nothing that makes it difficult for people to invest in your country by feeling that your policies are going to change when the minister changes or when the government changes,” he said.

Asamoah added: “Infrastructure investment is long term and requires long term money. It takes five years to build a power plant and it takes 10 years to get the money back.

“Accordingly, governments should join hands with the public and private sector to effectively develop their infrastructure and expand economies.”

Dr Ibrahim Assane Mayaki, the chief executive officer of NEPAD Planning and Coordinating Agency, head-quartered in Midrand, South Africa, sums it up: “For real development in every sphere to happen, African countries need to improve their infrastructure, and policy consistency and clarity should be part of key ingredients for infrastructure development.”