Should We Be Investing More in Infrastructure?

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Recently, I was able to return to Tanzania, a country which I spent considerable time in, yet haven’t returned to in nearly two years. The significant growth of buildings and industry in Dar-es-Salaam amazed me.  Yet, what really stood out to me were the roads, something so seemingly simple and mundane.  Two years ago when I left, they had been working on the main road north out of the city, Bagamoyo Road.
 

This meant it could take an hour and a half to two hours to get from city centre out to the “suburbs” thirteen kilometers out of the city.  So when we travelled from Bagamoyo to Dar-es-Salaam, I was prepared for a long, slow few hours of travel.  I was pleasantly surprised when the trip from the outskirts of the city to the peninsula only took me half an hour, as we sped along the new and improved, two-lane Bagamoyo Road.
 
Think of all the gains that come along with that reduction in travel time.  It means people who work in city centre can be more productive, without wasting hours of travel time commuting to and from work.  There’s more incentive for people living on the outskirts of the city to travel to the commercial centre to spend their money.  Most importantly, it cuts down on the high transportation costs which are factored into all goods, benefiting local consumers.  So shouldn’t we be focusing on infrastructure for international development?
 
While human development projects are noble and necessary ideas, they largely depend on access.  Improving education is valuable, but what happens when the students and staff have no way to get to school?  Creating stronger market institutions can help increase benefits from agricultural goods, but if there is no transport system the goods will never make it to market in the first place. If there is not an effective port, commodity goods can’t be exported effectively and imports cost more, reducing benefits from international trade.  Sanitation and hygiene projects require access to put in sewer lines and wastewater treatments.  Without infrastructure most of the other development projects cannot be as effective.
 
The World Bank suggests that investment in infrastructure can raise GDP growth by 1 – 2 percent initially. However, in the past investment infrastructure has been severely lacking. According to an article by the Economist, Sub-Saharan Africa spends $6.8 billion on paving roads, when it needs to be spending closer to $10 billion.  This trend is starting to change though, as of late infrastructure is getting more attention from governments, development agencies and private investors.  This year the first Cairo to Cape Town will be completed, when Kenya finishes the final segment of road, enhancing regional trade and cooperation.  With these new roads and infrastructure, investment in human capital development projects can be more effectively accessed and access is key.
 
 
Jessica Carroll is a first year Master’s student at the Norman Paterson School of International Affairs and an international student from the United States.  Her research topics of interest are foreign direct investment and its role in economic development, particularly in Africa.  Currently she is working on a paper exploring commodity exchanges and their economic benefits in Sub-Saharan Africa. 
 
Featured Photo from Wikimedia Commons