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Sustainably financing infrastructure in sub-Saharan Africa - What role for the DAC?

Aug 09, 2021 | OECD

In a climate of heightened debt vulnerabilities, countries in sub-Saharan Africa struggle to fill the gap in infrastructure finance, which is paramount to achieving their sustainable development objectives. At the same time, the infrastructure financing landscape in the region has become increasingly diverse and challenging to navigate. This paper reviews the role of Development Assistance Committee (DAC) members in supporting countries to address mounting infrastructure needs while avoiding and mitigating potential debt crises.

The first part of the paper provides an overview of the infrastructure needs in sub-Saharan Africa. The second part presents the changes in infrastructure financing, highlighting the dominant roles of domestic government and non-DAC lenders. The third part explains how infrastructure finance can be a potential driver for the debt build-up in the region; but that the quality of spending and the diversity of financing providers can be mitigating factors. The fourth part includes policy recommendations for DAC members.