Econ28


Building and connecting Africa: Infrastructure construction and economic development in the XXIst century 
Convenorss:
Carlos Oya (SOAS)
Florian Schaefer (London School of Economics and Political Science)
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Stream:
Economy and Development
Location:
50 George Square, G.04
Sessions:
Wednesday 12 June, 14:15-15:45, 16:15-17:45 (UTC+0)

Short Abstract:

This panel focuses on the dynamics and impact of economic infrastructure projects in Sub-Saharan Africa, with particular focus on transport and energy, and issues of costs, quality of projects, impacts on economic diversification, employment and development of local construction capabilities.

Long Abstract

In the past 15 years there has been a revival of the development of economic infrastructure in Sub-Saharan Africa. Roads, bridges, dams, ports and airports have been built or rehabilitated in many countries. Transport and energy are indeed key priorities in this wave of infrastructural development as they are particularly important for Africa's structural change and economic diversification agenda. A significant impulse has been provided by the availability of Chinese finance for infrastructure, totalling $315bn in contract revenues between 2003 and 2016, representing nearly 50% of the total infrastructure market in Africa. Other international finance institutions are also increasingly contributing to fill the infrastructure gap in Africa which was estimated at $93 billion per year in 2009.

Despite these rapid developments and the obvious physical and economic impact on African economies and geographies, there is still limited research on the dynamics and impact of economic infrastructure projects in the region. There are many questions of interest, but we would like to invite papers that shed light on questions like: what is the record of infrastructure expansion in the past two decades? What kinds of project have been prioritised and why? How do different road/dam projects compare across countries, contractors and by sources of finance in terms of their costs, timelines and quality? What are the effects on employment? Have African contractors benefited from the expansion of projects despite the arrival of international contractors? What are the linkages between infrastructure projects and industrialization, and what policies underpin such linkages?

Accepted papers:

Authors:

Serena Masino (University of Westminster)
Mavis Akuffobea (CSIR-Science and Technology Policy Research Institute)

Paper short abstract:

The infrastructure boom across Sub-Saharan Africa is associated to a large influx of foreign capital and technology. While this creates opportunities forlocal workers and companies, it also consolidates power dynamics which are difficult to overcome in the absence of appropriate local regulation.

Paper long abstract:

The Sub-Saharan African construction boom underlines the urbanisation trend across the continent; large-scale creation of employment; renewed and extended access to energy, transport, commerce. At the same time, however, the proliferation of foreign companies established itself in an institutional and legislative gap which allows for the co-existence of labour regimes and for the consolidation of casualisation trends in the labour market.

This study relies on case-study material from the real estate and construction sectors in the capital city of Ghana, Accra, to investigate the interaction between foreign employers and local employees. Extensive interviews with mangers, workers, and institutional actors help uncover a web of emerging labour and industrial relations and a matrix of winners and losers in the process. In particular, both local labourers and local companies can be winners and losers at the same time, when subjected to the flexibilisation and casualisation forces of globalisation.

Many foreign companies are found to "export" or bring with them home-country labour regimes, while hands-off local institutions effectively allow them to do so. This means that sub-optimal labour standards and work practices often prevail, in violation of local labour legislation. In addition, most companies maintain a lean core worker structure while flexibly and discontinuously tapping into an army of causal labourers whenever production pressures increase. This allows foreign contractors to stay in business in an increasingly competitive real estate and construction sector; but it also consolidates a pattern of insecure and unrewarding employment for the poorest and least empowered segments of the workforce.

Author:

Jon Phillips (University of Cambridge)

Paper short abstract:

State-centric analysis of infrastructure investment neglects how dependence is created through networks of relations between firms and between firms and the state. Poor project outcomes and limited structural change in the Ghanaian energy sector are explained as a product of these relations

Paper long abstract:

What do infrastructure projects do, politically and economically? For some Ghanaian policy makers, Chinese-financed energy infrastructure offered a political and economic alternative to the World Bank and the prospect of capturing greater value from hydrocarbon production within the domestic economy. In this paper, I account for unmet expectations of the infrastructural promise in Ghana, offering a spatial and material analysis of Chinese and US investments in natural gas and electricity infrastructure, 2007-2015. First, the combined effect of domestic factional struggles and the conditions of development finance have produced poor outcomes within the project boundary: inflated costs, poor quality of construction, minimal local participation and technological capability building, and restricted local value capture. Second, financing energy infrastructure that reshapes unequal global exchange in primary resources involves striking new bargains with fractions of capital and foreign states/multilateral agencies. Infrastructural connection has incorporated the Ghanaian energy sector into transnational relationships that have intensified pressure from investors and donors to restructure the energy industry. A series of techno-political interventions from Chinese, US and multilateral partners have targeted the securitization of contracts necessary to forge a new domestic production network for natural gas. These technical and financial processes are imbued with power, shaping the distribution of resources, risk and value of infrastructural development. In concluding, I argue that dominant state-centric frameworks for understanding infrastructural investment in Africa fail to capture how states are important in creating and maintaining relations of dependency and dominance produced through networks of inter-firm relations.

Authors:

Carlos Oya (SOAS)
Fernandes Wanda (SOAS, University of London)
Borja Monreal (SIC4Change / FAO)

Paper short abstract:

We analyse the configuration and segmentation of the infrastructure constrution market in post-2002 Angola, by comparing national and international contractors, organised around distinct segments by origin of contractors, finance and type of projects.

Paper long abstract:

In a context of post conflict reconstruction a key opportunity for economic development is the accelerated growth of the sector of construction companies with capacities to build large-scale infrastructure and where both rent-seeking opportunities and development outcomes are significant.

The Angolan case was also particular because the post-conflict reconstruction period coincided with the oil price boom, thereby generating additional volume of rents and more potential for different kinds of public works and an expansion of the construction sector.

This led not only to massive contract opportunities to well established international contractors, especially from Portugal and Brazil, but also to two new sets of players:

• Chinese SOEs, on the back of large credit lines linking oil rents and infrastructure projects

• Angolan ventures, associated with the emerging business elite linked to the MPLA and the Dos Santos business/political networks

We argue that, during the years of bonanza, the volume of rents, combined with massive infrastructure needs and a political appetite to deliver 'development' led to the crafting of different market spaces for these different sets of contractors. Different 'segments' were therefore gradually produced, which have survived to this day. The post 2015 crisis has presented a new scenario where contractors scramble for contracts and suffer from finance and forex shortages. How they responded to the crisis also reflects the different constraints and incentives these segments confront.

Authors:

Tom Goodfellow (University of Sheffield)
Zhengli Huang (Tongji University)

Paper short abstract:

We explore major city-level Chinese transport infrastructure investments in Addis Ababa & Kampala. We argue that these lack coherent development logic, being driven forward by contractors rather than states, and explore how they were negotiated as well as the challenges of integration they generate.

Paper long abstract:

The extent to which Chinese agencies dominate infrastructure development in Africa is now widely known and has generated intense global interest. Yet behind the headlines there is still little research on who drives these projects forward, what their temporal horizons are, and how they influence the territories and communities around them. The dominant interest in multi-billion dollar megaprojects connecting far-flung cities and ports has also left smaller scale (but equally disruptive) infrastructure projects relatively underexplored. We consider two projects at the metropolitan scale: the Light Rail Transit in Addis Ababa and the expressway linking Kampala to Entebbe airport. These projects are highly significant because they are designed and implemented through opaque negotiations between national elites and Chinese agencies, with little or no engagement from city authorities, despite the fact that their major consequences are at the urban scale.

Unlike the railways linking major ports to the African interior, many of which explicitly build on colonial legacies and are linked to the Belt and Road vision, these city-level projects lack a coherent overarching logic. We argue that profit-seeking Chinese contractors themselves play a key role in driving city-level infrastructural modalities, engaging opportunistically with African national governments whose agendas are inconsistent and malleable. Meanwhile, city planning authorities and other local stakeholders are shut out of the design and implementation. These processes mean that while these projects are beneficial for some, their outcomes are contingent, haphazard and temporally unpredictable, rather than being planned or integrated with broader urban development policies and processes.

Authors:

Rebecca Hanlin (African Centre for Technology Studies)
Rasmus Lema (Department of Business and Management)

Paper short abstract:

The paper considers the potential of renewable infrastructure projects to create opportunities for sustainable industrialisation through building long term capabilities relevant across multiple sectors.

Paper long abstract:

After several decades in the shadows, industrialisation strategy and industrial policy are back-on the agenda. In development, this means that ideas of classical development economists are being dusted off; including the centrality of development 'projects' and notably their linkage effects. The resurgence of industrial policy coincides with a globally pervasive sustainability agenda which combines into the SDG notion of sustainable industrialisation. This attention coincides with findings from a project we are managing (http://irekproject.net) considering Kenyan renewable electrification (solar and wind) projects and capabilities building. Our findings so far highlight: (1) Despite initial expectations that external engineering capabilities would be used by foreign firms, significant local expertise is available and is being used; with the potential for more opportunities for these engineers in the future. Work in other fields highlights how providing workers with an initial opportunity provides them with a spring board for other opportunities and builds the human capital of the country. (2) Local job creation is, on the other hand, hampered by the path dependency and lock-in of certain technologies (notably the dominance of solar PV technology over wind turbines) which has resulted in small wind manufacturers indigenous to Kenya closing down. (3) Renewable electrification occurs through projects that provide the starting point for upscaling. We contend that more work in this area is needed but that it highlights the importance of directive policy instruments in Kenya and potentially elsewhere in Africa as well.

Author:

Barnaby Dye (University of Manchester)

Paper short abstract:

The paper analyses key changes to Africa's development and infrastructure landscape through examination of the 21st century dam resurgence. It follows a historically-comparative and multi-case study perspective, charting who it involves, what its processes are and what outcomes it is leading to.

Paper long abstract:

This paper examines the rise of dams as illustrative of broader trends in infrastructure in the 21st century that aim for economic development. It takes a multi-case analysis focusing especially on three dams in Tanzania and Rwanda, but places these in a comparative perspective of dam projects in Ethiopia and Ghana and alongside other energy generation projects in these countries. It outlines trends in who is building dams (who are the main financiers, construction companies and government regimes) and links this to the outcomes of projects and energy sectors. It therefore charts the rise of the emerging powers, the growing number of private-sector actors and return of 'traditional' development financiers. This allows assessment of typical changes in the dam resurgence, including the way in which hydropower has become a primary rationale and the trend towards reformist policies that minimise socio-environmental negatives. It finds variation between the different actors engaged in the dam resurgence, including on the timeliness of construction, the proficiency of the final infrastructure at generating benefits (principally electricity) and degree of negative impacts on the economy and environment. Whilst charting such trends in international actors, the paper finds that governments in Africa determine the ultimate contribution of dams to economic development, as they fundamentally influence the electricity sector. Overall, the paper analyses key changes in the development landscape of infrastructure in Africa from a historically-comparative and multi-case study perspective, charting who it involves, what its processes are and what outcomes it is leading to.

Author:

Moïse Williams Pokam Kamdem (University of Dschang)

Paper short abstract:

The construction of new electrical infrastructures in Cameroon is presented as the solution to the energy deficit that persists for two decades and which hampers the economic prospects. This paper aims to discuss the place of these infrastructures in the State growth strategy of this African country

Paper long abstract:

Since a decade, Cameroon has launched a new phase of development of its hydroelectric potential. This is part of a trend that sees access to electricity included in the International Agenda, and many African countries making heavy investments for the rehabilitation and the construction of energy infrastructures. Although the construction of Memve'ele, Lom Pangar, Mekin and Nachtigal dams has not been completed, they have been presented since their conception as the solution to the energy deficit that persists since the beginning of the 2000s. They are also one of the symbols of the government ambitions to revive and accelerate the economic growth of this country. Relying on Chinese investments and contractors in particular, Cameroon then aims to triple its electricity production in 2020 to reach 3,000 MW by investing more than $ 11 billion.

This paper aims at discussing the development of the electrical infrastructures in Cameroon by putting it in relation with the objectives of economic growth of this country. Three questions are particularly examined: 1) How does Cameroon's energy policy fit in with the "global electrification"? 2) What is the place of electrical infrastructure projects in the discourses and policies of growth in Cameroon? 3) Why are Chinese investments and contractors playing a prominent role in this process?