The issue of reducing poverty has been one of the main topics of international concerns for many years. The problem exists in all regions of the globe. Sub-Saharan Africa has the biggest poverty percentage in the world (The World Bank 2013). There have been many different ideas on how to reduce the poverty in Africa and when certain ideas failed, new ones have emerged. There also has been a lot of effort to analyze why African countries have failed in fighting poverty even while as a continent they receive the greatest amount of aid per capita in the world (OECD 2013). When we take a look at world economic history after World War II, we see that the African region was a little better off than developing countries in Asia and Latin America, but in the last few decades, this situation has changed for the worse and now Africa is one of the poorest (Maswana 2006).
As for determining the reasons for Africa’s continuing poverty, there have been a lot of ideas and one among them looks as one of the most credible: the lack of good infrastructure in Africa. The issues with infrastructure in Africa have been taken into consideration on the international level and there are now some projects and organizations that are working toward building new and improving old infrastructure. One of the organizations working on African infrastructure is the Infrastructure Consortium for Africa (ICA) that was organized as a response to African poverty problems.
The ICA was organized by G8 countries at Gleneagles Summit in 2005. The ICA is not a financial organization, but it attracts investors and donors to infrastructure programs in Africa. The work of ICA is supported by small secretariat located in Tunis and financed by voluntary donations from member countries. The ICA identifies itself as “a tripartite relationship between bilateral donors, multilateral agencies and African institutions” (ICA 2012). The ICA is populated by all the G8 countries, as well as a number of multilateral agencies: the World Bank, International Finance Corporation (IFC), European Commission (EC) and European Investment Bank (EIB). African members include the African Development Bank and Development Bank of Southern Africa, and additional organizations are invited to meetings as observers.
The main purpose of the Consortium is to “help improve the lives and economic wellbeing of Africa’s people through encouraging, supporting and promoting increased investment in infrastructure in Africa”(ICA 2012). It was designed to find the funding for infrastructure programs in Africa in four areas: water, energy, transport, and information and communication technology (ICT). The ICA web site provides statistics on the total investment to African infrastructure made through this organization; $29.1bn was provided in 2010 — more than doubling in amount since the first contributions of 2007. As for the water project investments, despite increasing by 70% since 2009, it still comprises only 13% of the ICA commitments to infrastructure (ICA 2010). All of the sectors to which aid is allocated are targeted in the hopes of reducing poverty in this region. Water is a particularly significant concern, as people still fail to have access to clean water. Access to clean water reduces illness; water infrastructure can also create jobs for the local population.
The water sector of ICA is divided into two projects; one concentrating on water resources and storage, and the other focusing on water supply and sanitation. There is one particular project in the water sector that has been getting a lot of attention lately due to its size and importance – the ICA Water Platform project. The Water Platform project was established in 2011 following a German initiative to raise finances for sustainable water infrastructure in Africa from public and private sources. The finances raised by the ICA helped facilitate dialogue between different parties interested in investing in Africa. This project is goal-oriented and it includes all aspects of water infrastructure from water provision to water management. It is a new initiative organizing its first meeting in March 2012. The ICA’s water project is needed in Africa and it will help improvement of life quality in this region by helping improve production in many economic sectors, especially in agriculture and manufacturing (Hoess 2012).
Busani Moyo’s paper “Infrastructure Quality and Manufacturing Export in Africa: a Firm-Level Analysis” argues that the lack of decent infrastructure in majority of countries on this continent is the main reason why the export led development is problematic. The poor infrastructure makes it difficult for companies to deliver their product on time, or at all (Moyo 2012). As for water infrastructure’s effect on the manufacturing industry, it is affecting development in areas that require water for their manufacture, such as the production of food, chemicals, paper, etc. There are some existing manufactures in Africa that produce mentioned before products for export, but due to irregular water supply the production works at an intermittent pace. The irregular production makes it hard to find customers that are willing to deal with this uneven supply. As a result, there are not many manufacturing companies in Africa, and those that exist fail to prosper even where the countries have an educated workforce and other resources needed for manufacturing. This study shows that the investment in new infrastructure in general and in water infrastructure in particular will bring economic growth to this region and will help bring many people out of poverty.
The need for water storage has been present in Africa for some time. This is a continent well known for hot weather and drought. The access to drinking water is only one side of the problem; there is also a need for water access for agricultures use. Sarah Sabaratnam in her article on agriculture problems in Africa (2003) argued that “Africa needs water, not GM [genetically modified] crops.” Her article also included a quote from Jacques Diouf (who was the head of UN’s Food and Agriculture Organization for almost two decades) that states that two main problems of agricultural development in Africa is water and the infrastructure (Sabaratnam 2003). Because there is not enough water during the hot time of the year, many people do not have enough food to eat. The limited agriculture production creates a problem for the entire economy. Some of the economists that work in development argue that an increase in agricultural production is the first step in a successful economic development. An additional difficulty in increasing food production in Africa is the uneven rain fall, with some months much dryer then others and unsuitable for irrigation. The problem of irrigation in Africa during the dry season can be fixed or at least improved with new infrastructure that would store the water during rain seasons and/or bring water from remotely located rivers. ICA has a role to play here with various plans for financing for building new infrastructure that will bring water to many different areas. Other benefits of building water infrastructure would include producing hydropower, building fisheries, and creating job opportunities.
Ethiopia can be used as an example of how improved water infrastructure will affect the food security and agricultural development. Tesfaye Tafesse in an article “Water infrastructure and food security linkages in three selected regions of Ethiopia” provides an overview of how the infrastructure in general and water infrastructure in particular affect food security and development in this country. Most of the Ethiopian population is dependent on subsistence agriculture for food and income and as a result of the harsh weather, the majority of the population often experiences food insecurities. Due to lack of water infrastructure, Ethiopian farmers are completely depend on rainfall that is unpredictable and erratic, leading to low agricultural production. Geographically Ethiopia has many rivers, but due to lack of infrastructure, the irrigation systems remain undeveloped, demonstrating a clear need for change in this sector. The majority of the population is employed in the agricultural sector that does not provide stable income and pushing about half of the rural Ethiopian population into poverty. The easiest way to bring these people out of poverty would be to increase their capability for agricultural production and one of the best ways to do this is to build necessary infrastructure to bring water to the farmers (Tafesse 2012).
Fighting poverty in any region involves economic growth through the reduction of gender inequality, and in many regions, the lack of infrastructure is one factor constraining women’s economic opportunities. One of main house work responsibilities of women in many African countries is to bring water to the house for different uses, in many cases having to walk for long distances. If more extensive and higher quality water infrastructure existed to bring water to households in Africa there would be more time for women to engage in other productive tasks, like market-based labor activities. The ICA’s help in building water infrastructure would help decrease the amount of time women spend doing the house work that will allow them to start working and earning wages. Gayatri Koolwal and Dominique Van De Walle in their article “Access to Water, Women’s Work, and Child Outcomes” indicate “that greater participation by women in market-based activities would yield desirable development outcomes” (Koolwal and van de Walle 2013). The same authors also state that women in market-based activities “can also raise child welfare, on the grounds that extra income to women is likely to be invested in children” (Koolwal and van de Walle 2013).
Since the Water Platform project of ICA is relevantly new, it is too early to analyze the results but the ICA’s data on investment in African infrastructure from 2007 to 2010 shows that this organization has some success in achieving its goal. The official report for 2011 shows a decrease of 10% in investments in the water sector; this decrease is lower than the fall in other sectors, but still significant in West Africa (ICA 2011). The statistics provided only include the data up to 2011; growth in all investments is anticipated due to the expansion of bilateral donors from G8 countries to all G20 countries in 2011. There is also the possibility of non-members of G20 to join the ICA if they wish to invest. With good management, additional funding for the much needed water infrastructure will follow.
Hoess, Sonja. ICA Water Platform. May 8, 2012.http://www1.ifc.org/wps/wcm/connect/c0dfd7804ba8680485d0e71be6561834/ICA….
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—. Annual Report 2010. 2010.http://www.icafrica.org/fileadmin/documents/2011/ICA_AR_2010_final_optim….
—. Annual Report 2011. 2011.http://www.icafrica.org/fileadmin/documents/Publications/ICA%20ANNUAL%20….
—. ICA Contributors. 2012. http://www.icafrica.org/en/about-ica/ica-contributors/.
Koolwal, Gaatri, and Dominique van de Walle. “Access to Water, Women’s Work, and Child Outcomes.” Economic Development and Cultural Change, January 2013: Volume 61, Number 2.
Maswana, Jean-Claude. Economics Development Patterns and Outcomes in Africa and Asia. February 2006. http://mpra.ub.uni-muenchen.de/5551/1/MPRA_paper_5551.pdf.
Moyo, Busani. “Infrastructure Quality and Manufacturing Exports in Africa: A firm-level analysis.” South African Journal of Economics, September 2012: 367-386.
OECD. Aid Statistics by Region. February 2013. href=”http://www.oecd.org/dac/stats/regioncharts.htm”>http://www.oecd.org/dac/stats/regioncharts.htm.
Sabaratnam, Sarah. Africa needs water, not GM crops. December 2, 2003.http://www.accessmylibrary.com/coms2/summary_0286-21903765_ITM.
Tafesse, Tesfaye. “Water Infrastructure and Food Security Linkages in Three Selected Regions of Ethiopia.” Eastern Africa Social Science Research Review, January 2012: Volume 28, Number 1.
The World Bank. Poverty. 2013. http://data.worldbank.org/topic/poverty.