Publication: Leveraging Private Sector Investment in Digital Communications Infrastructure in Eastern Africa
Loading...
Date
2024-08-02
ISSN
Published
2024-08-02
Author(s)
Editor(s)
Abstract
This study provides guidance on World Bank involvement in Digital Communications Infrastructure (DCI) projects in which finance has been extended to support build-out. In particular, the study provides guidance to inform World Bank projects in Djibouti, Ethiopia, Kenya, Madagascar, Somalia and South Sudan where more than US$1 billoin has been committed by the World Bank for improving digital infrastructure, services and skills. Through competitive procurement processes that engage private sector network operators, it is possible to amplify the funds available to countries by leveraging funds from network operators to ensure sustainable network deployment. The report looks at mechanisms such as reverse auctions, anchor tenant models, public-private partnerships and invstment guarantees to assess which work best in different marekt environments.
Link to Data Set
Citation
“World Bank; CEPA. 2024. Leveraging Private Sector Investment in Digital Communications Infrastructure in Eastern Africa. © World Bank. http://hdl.handle.net/10986/41991 License: CC BY-NC 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Financing Information and Communication Infrastructure Needs in the Developing World : Public and Private Roles(Washington, DC, 2005)Over the past ten years, private-sector-led growth has revolutionized access to telecommunications. Every region of the developing world did benefit in terms of investment, and rollout. This revolution would have been impossible without government reform, and oversight. Advanced information and communication infrastructure (ICI) are increasingly important to doing business in a globalizing world. Governments, enterprises, civil society, workers, and poor populations in the developing countries need more affordable access. This report proposes strategies that governments can carry out to attract private investment, and ensure the continued evolution, and spread of information and communication infrastructure. These strategies encompass more than sector policy alone, for investment decisions are based on a wide range of factors including, for example, the roles played by financial sector development, and the broader investment environment. The strategies also include potential public sector investments that can catalyze ICI rollout in sub-sectors where the private sector is not prepared to intervene on its own.Publication Governance and Private Investment in the Middle East and North Africa(World Bank, Washington, DC, 2006-06)This paper addresses the issue of the low level of private investment in the Middle East and North Africa (MENA) region, with special emphasis on the role of governance. Based on the existing literature, the authors categorize what types of governance institutions are more detrimental to entrepreneurial investments. They then estimate a simultaneous model of private investment and governance quality where economic policies concurrently explain both variables. The empirical results show that governance plays a significant role in private investment decisions. This result is particularly true in the case of "administrative quality" in the form of control of corruption, bureaucratic quality, investment-friendly profile of administration, and law and order, as well as for "political stability." Evidence in favor of "public accountability" seems, however, less robust. The estimations also stress that structural reforms-such as financial development and trade openness-and human development affect private investment decisions directly, and/or through their positive impact on governance. These findings bring new empirical evidence on the subject of private investment in the developing world and in MENA countries in particular.Publication Public Infrastructure and Private Investment in the Middle East and North Africa(World Bank, Washington, DC, 2005-07)The authors examine the impact of public infrastructure on private capital formation in three countries of the Middle East and North Africa-Egypt, Jordan, and Tunisia. They highlight various channels through which public infrastructure may affect private investment. Then they describe their empirical framework, which is based on a vector autoregression (VAR) model that accounts for flows and (quality-adjusted) stocks of public infrastructure, private investment, as well as changes in output, private sector credit, and the real exchange rate. The authors propose two aggregate measures of the quality of public infrastructure and use principal components to derive a composite indicator. Their analysis suggests that public infrastructure has both "flow" and "stock" effects on private investment in Egypt, but only a "stock" effect in Jordan and Tunisia. But these effects are small and short-lived, reflecting the unfavorable environment for private investment in their sample of countries. Reducing unproductive public capital expenditure and improving quality must be accompanied by policy reforms aimed at limiting investment to infrastructure capital that crowds in the private sector and corrects for fundamental market failures. This will entail privatization and greater involvement of the private sector in infrastructure investment. While infrastructure (in the form of the provision of critical telecommunications, transport, and energy services) is important, other improvements in the environment in which domestic investment is conducted are crucial. These include the need to provide financing on adequate terms and guarantee a secure and efficient justice system.Publication Cambodia : Review of Government Information and Communications Technologies Policies and Investments(Washington, DC, 2010-03)Further, governments are using information and communication technologies (ICT) as tools to reduce transaction costs and processing time, and increase government revenues. Further, the potential to access public services at home or at a local Internet kiosk empowers citizens in rural areas, including women and minorities. Access to relevant public information on rights and benefits, inheritance and family laws, health care, and housing can be provided through the Internet or mobile phone which translates to easier access and less time than traveling to or queuing up at government departments. The Royal Government of Cambodia (the Government) has taken various initiatives regarding the streamlining of ICTs in administration functions and several core agencies have invested or are planning on investing in information systems, databases of various types, websites, communications networks, etc. However, this figure will be significantly higher when the cost for ICT components under sector projects, such as under education, public finance, and trade are included. As the number of projects with ICT components increases in the Government, leadership and overall governance of ICT implementation will become increasingly important. ICT investments often involve high costs and big risks. Failure rates of ICT projects in governments around the world are notable. Costs for failure not only include monetary loss but costs in terms of reputation of the implementing agency or donor, and diminished incentives for future attempts in using ICTs.Publication Determinants of a Digital Divide in Sub-Saharan Africa : A Spatial Econometric Analysis of Cell Phone Coverage(World Bank, Washington, DC, 2008-02)Most discussions of the digital divide treat it as a "North-South" issue, but the conventional dichotomy doesn't apply to cell phones in Sub-Saharan Africa. Although almost all Sub-Saharan countries are poor by international standards, they exhibit great disparities in coverage by cell telephone systems. Buys, Dasgupta, Thomas and Wheeler investigate the determinants of these disparities with a spatially-disaggregated model that employs locational information for cell-phone towers across over 990,000 4.6-km grid squares in Sub-Saharan Africa. Using probit techniques, a probability model with adjustments for spatial autocorrelation has been estimated that relates the likelihood of cell-tower location within a grid square to potential market size (proximate population); installation and maintenance cost factors related to accessibility (elevation, slope, distance from a main road, distance from the nearest large city); and national competition policy. Probit estimates indicate strong, significant results for the supply-demand variables, and very strong results for the competition policy index. Simulations based on the econometric results suggest that a generalized improvement in competition policy to a level that currently characterizes the best-performing states in Sub-Saharan Africa could lead to huge improvements in cell-phone area coverage for many states currently with poor policy performance, and an overall coverage increase of nearly 100 percent.
Users also downloaded
Showing related downloaded files
Publication Digital Progress and Trends Report 2023(Washington, DC: World Bank, 2024-03-05)Digitalization is the transformational opportunity of our time. The digital sector has become a powerhouse of innovation, economic growth, and job creation. Value added in the IT services sector grew at 8 percent annually during 2000–22, nearly twice as fast as the global economy. Employment growth in IT services reached 7 percent annually, six times higher than total employment growth. The diffusion and adoption of digital technologies are just as critical as their invention. Digital uptake has accelerated since the COVID-19 pandemic, with 1.5 billion new internet users added from 2018 to 2022. The share of firms investing in digital solutions around the world has more than doubled from 2020 to 2022. Low-income countries, vulnerable populations, and small firms, however, have been falling behind, while transformative digital innovations such as artificial intelligence (AI) have been accelerating in higher-income countries. Although more than 90 percent of the population in high-income countries was online in 2022, only one in four people in low-income countries used the internet, and the speed of their connection was typically only a small fraction of that in wealthier countries. As businesses in technologically advanced countries integrate generative AI into their products and services, less than half of the businesses in many low- and middle-income countries have an internet connection. The growing digital divide is exacerbating the poverty and productivity gaps between richer and poorer economies. The Digital Progress and Trends Report series will track global digitalization progress and highlight policy trends, debates, and implications for low- and middle-income countries. The series adds to the global efforts to study the progress and trends of digitalization in two main ways: · By compiling, curating, and analyzing data from diverse sources to present a comprehensive picture of digitalization in low- and middle-income countries, including in-depth analyses on understudied topics. · By developing insights on policy opportunities, challenges, and debates and reflecting the perspectives of various stakeholders and the World Bank’s operational experiences. This report, the first in the series, aims to inform evidence-based policy making and motivate action among internal and external audiences and stakeholders. The report will bring global attention to high-performing countries that have valuable experience to share as well as to areas where efforts will need to be redoubled.Publication World Development Report 2017(Washington, DC: World Bank, 2017-01-30)Why are carefully designed, sensible policies too often not adopted or implemented? When they are, why do they often fail to generate development outcomes such as security, growth, and equity? And why do some bad policies endure? This book addresses these fundamental questions, which are at the heart of development. Policy making and policy implementation do not occur in a vacuum. Rather, they take place in complex political and social settings, in which individuals and groups with unequal power interact within changing rules as they pursue conflicting interests. The process of these interactions is what this Report calls governance, and the space in which these interactions take place, the policy arena. The capacity of actors to commit and their willingness to cooperate and coordinate to achieve socially desirable goals are what matter for effectiveness. However, who bargains, who is excluded, and what barriers block entry to the policy arena determine the selection and implementation of policies and, consequently, their impact on development outcomes. Exclusion, capture, and clientelism are manifestations of power asymmetries that lead to failures to achieve security, growth, and equity. The distribution of power in society is partly determined by history. Yet, there is room for positive change. This Report reveals that governance can mitigate, even overcome, power asymmetries to bring about more effective policy interventions that achieve sustainable improvements in security, growth, and equity. This happens by shifting the incentives of those with power, reshaping their preferences in favor of good outcomes, and taking into account the interests of previously excluded participants. These changes can come about through bargains among elites and greater citizen engagement, as well as by international actors supporting rules that strengthen coalitions for reform.Publication Africa's Pulse, No. 30, October 2024: Transforming Education for Inclusive Growth(Washington, DC: World Bank, 2024-10-14)Sub-Saharan Africa's growth recovery has resumed. Economic activity in the region is projected to grow by 3.0 percent in 2024, after bottoming out at 2.4 percent in 2023. Private consumption and investment contributions have supported the growth recovery in 2024. Growth is expected to accelerate further to 4 percent in 2025-26. However, the outlook remains uncertain despite falling global inflation and resilient global activity supporting growth in the region. Sub-Saharan Africa needs to further accelerate growth to reduce extreme poverty and enhance prosperity. GDP per capita is projected to grow by 0.5 percent in 2024 and 1.4 percent in 2025, but this expected increase would still leave the region's living standards below their level in 2014. Macroeconomic stability and human capital investments needed to achieve inclusive growth and transform the education system are vital for the region. Efforts should focus on equipping children with basic skills and providing the youth and workforce with higher-order skills. Increasing investment in education, efficient spending, and collaboration with local partners are needed to achieve universal education by 2030. Addressing these challenges will require a strong policy response to bridge the spending gap and meet education goals.Publication Global Economic Prospects, June 2024(Washington, DC: World Bank, 2024-06-11)After several years of negative shocks, global growth is expected to hold steady in 2024 and then edge up in the next couple of years, in part aided by cautious monetary policy easing as inflation gradually declines. However, economic prospects are envisaged to remain tepid, especially in the most vulnerable countries. Risks to the outlook, while more balanced, are still tilted to the downside, including the possibility of escalating geopolitical tensions, further trade fragmentation, and higher-for-longer interest rates. Natural disasters related to climate change could also hinder activity. Subdued growth prospects across many emerging market and developing economies and continued risks underscore the need for decisive policy action at the global and national levels. Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semiannual basis (in January and June). Each edition includes analytical pieces on topical policy challenges faced by these economies.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.