Infrastructure is costly but necessary to development: Transparency is a must

Sometimes it is easy to forget what an essential need infrastructure is. While getting ready to go to school or work this morning, did you spend much time thinking about the role that running water, electricity and all-weather roads played in getting you there? I know that I did not. However, a more critical look at the importance of infrastructure in Africa’s development is crucial for economic growth and poverty relief throughout the continent, as a lack of physical infrastructure is one of its most consistently overlooked problems.

Site of new power lines for MCC energy project

Currently, 75 percent of Africans live without electricity, 95 percent of African agriculture lacks proper irrigation systems and the majority of rural communities have no road access that allows them to reach medical care and market places. These major constraints reflect the crucial need to prioritize the construction of basic public infrastructure. Without it, developing countries, particularly those in Africa, cannot realistically expect to achieve sustainable growth and development. However, the sector which delivers these assets, the construction sector, is prone to inefficiency, mismanagement and corruption.

Anecdotal evidence from Transparency International puts such losses at 10 to 30 percent of a single projects value! So getting basic infrastructure to people who need it most is not just about spending more private and public funds, but making sure that what is spent results in affordable, adequate and appropriate infrastructure. The crux of the question is how we can make infrastructure spending more effective, especially in this economic climate when donor and recipient governments alike, are feeling the pinch.

Greater and more standardized practices of costing and accounting, for instance, will help ensure cost effectiveness and reduce the risk of investing in this sector, all of which will encourage pro-growth investments in other sectors. Transparency is essential for holding leaders to account for their use of public funds meant for the construction of infrastructure and crucial to citizens’ understanding of where, how and why schools, hospitals, roads and housing projects are being built.

With this in mind, ONE co-hosted an event with Transparency International, the World Bank and the Construction Sector Transparency Initiative (CoST) in Washington DC during the World Bank-IMF Autumn Meetings to discuss the challenges to, and solutions for, greater transparency in publicly financed construction. Speakers and civil society discussed specific multi-stakeholder tools that can be implemented to reach a higher standard of transparency in construction, from Africa through to Asia.

The panel of experts included:

  • Rajiv Lall, Infrastructure Development Finance Company Ltd, India
  • Prof. Paul Collier, Oxford University , UK ( and member of ONE’s Policy Advisory Board)
  • Christian Poortman, Transparency International
  • Vincent Lazatin, TAN Philippines and Chairman of CoST Philippines
  • Pearl Alice Marsh, ONE

The speakers and their viewpoints all agreed on the importance of infrastructure as a labor-absorbing, growth tool and the fundamental need for total transparency throughout its delivery, from design through to the build phases. Key recommendations reflected the need for immediate action to promote transparency by opening up public construction contracts and public ledgers and, where possible, to involve all stakeholders in the process, especially in African countries.

Overall, the event was a great success with good civil society engagement and interesting questions. Before finishing the discussion, however, it was important that the panel returned to the central reason for which transparent infrastructure investment is needed in the first place: to unleash more domestic resources to scale up underfunded sectors that will eventually catalyze economic growth and reduce poverty throughout Africa.

Every dollar saved on a single construction contract begins to add up when you realize that every year, governments tender for thousands infrastructure development contracts, across hundreds of projects. So, consider the importance of infrastructure in your day, and stay tuned over the coming months as ONE continues to work with experts and partners such as the CoST, and our members to push the development of transparency in infrastructure to the forefront of international policy agendas, including the G20.