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Infrastructure contributed 1.3 percentage points to Tanzania's annual per capital GDP growth during the 2000s. If the country's infrastructure endowment were improved to the level of the African leader, Mauritius, annual per capita growth rates could increase by 3.4 percent. Tanzania has made great progress in reforming its trunk roads, improving the quality of the road network. The country has also seen significant gains in ICT networks, and has one of the most competitive domestic air transport sectors in Africa. The power sector poses Tanzania's most serious infrastructure challenge. Despite significant improvements in pricing and operational performance in recent years, inefficiency still absorbs about 1.4 percent of GDP. Moreover, due to heavy reliance on hydro-power the sector remains vulnerable to climate variability. The port of Dar es Salaam also suffers from performance problems as rapid traffic growth has increasingly exposed deficiencies in storage and access to the portrait Poor access to safe water is another challenge, exacerbated by poor budget execution in the sector. Tanzania would need to invest USD 2.4 billion annually for 10 years to meet its infrastructure targets. Spending at that level would absorb just over 20 percent of the country's GDP. Existing spending stands at USD 1.2 billion a year. Tanzania loses USD 0.5 billion each year to inefficiencies such as underpricing, undercollection of revenue, overstaffing, and lack of budget prioritization. But even if inefficiencies could be fully captured, an annual funding gap of USD 0.7 billion would remain. That gap could be shrunk to USD 0.4 billion if lower-cost technologies were adopted and if regional power trade could be further developed.

Banks & Banking Reform --- Energy Production and Transportation --- Industry --- Infrastructure --- Infrastructure Economics --- Infrastructure Economics and Finance --- Macroeconomics and Economic Growth --- Town Water Supply and Sanitation --- Transport Economics Policy & Planning --- Africa

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Infrastructure contributed 1.2 percentage points to Malawi's annual per capital GDP growth over the past decade. Raising the country's infrastructure endowment to that of the region's middle-income countries could increase that contribution by 3.5 percentage points. Malawi's successes in infrastructure development include reaching the Millennium Development Goals for water and making GSM telephone signals widely available without public subsidy. Challenges include improving the reliability and sustainability of the power sector, raising funding for road maintenance, preventing overengineering of roads, enhancing market access in agricultural areas, and lowering the cost of information and communications services. The latter goal may be achievable by securing competitive access to the new submarine infrastructure on the East African coast. Addressing Malawi's infrastructure deficit would require sustained expenditures of almost USD 600 million per year over the decade 2006-15. During the mid-2000s, the country spent close to USD 200 million per year, about half of which went to the transport sector. Because of widespread inefficiencies-underpricing of power, improperly maintained roads, and utility distribution losses-about USD 200 million is wasted each year. But even if those inefficiencies were eliminated, Malawi would still face an annual infrastructure funding gap of almost USD 300 million. That gap could be cut to USD 100 million by engaging in regional trade of electricity, using lower-cost technologies in water and sanitation, and adopting less-ambitious road-building technologies. If inefficiencies were eliminated and recent spending levels sustained, Malawi could reach its infrastructure targets within 16 years.

Banks & Banking Reform --- Economic Growth --- Energy Production and Transportation --- Factors of Production --- Infrastructure Economics --- Infrastructure Economics and Finance --- Investing --- Output --- Rapid Growth --- Town Water Supply and Sanitation --- Transport Economics Policy & Planning

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This is the first paper to build a comprehensive empirical picture of power pricing practices across Sub-Saharan Africa, based on a new database of tariff structures in 27 countries for the years 2004-2008. Using a variety of quantitative indicators, the paper evaluates the performance of electricity tariffs against four key policy objectives: recovery of historic power production costs, efficient signaling of future power production costs, affordability to low income households, and distributional equity. As regards cost recovery, 80 percent of the countries in the sample fully recover operating costs, while only around 30 percent of the countries are practicing full recovery of capital costs. However, due to the fact that future power development may be based on a shift toward more economic technologies than those available in the past, existing tariffs look as though they would be consistent with Long Run Marginal Costs in nearly 40 percent of countries and hence provide efficient pricing signals. As regards affordability, today's average effective tariffs are affordable for 90 percent of today's customers. However, they would only be affordable for 25 percent of households that remain unconnected to the grid. Tariffs consistent with full recovery of economic costs would be affordable for 70 percent of the population. As regards equity, the highly regressive patterns of access to power services, ensure that subsidies delivered through electricity tariffs are without exception also highly regressive in distributional incidence. The conclusion is that achieving all four of these policy objectives simultaneously is almost impossible in the context of the high-cost low-income environment that characterizes much of SSA today. Hence most countries find themselves caught between cost recovery and affordability.

Affordability --- Cost recovery --- Cross-subsidization --- Debt Markets --- Energy --- Energy Production and Transportation --- Increasing block tariffs --- Infrastructure Economics --- International Trade and Trade Rules --- Macroeconomics and Economic Growth --- Power tariffs --- Trade Policy

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Coal mines and mining --- Mine closures