Infrastructure and development in Africa

Citation

Kuada, J. (2013), "Infrastructure and development in Africa", African Journal of Economic and Management Studies, Vol. 4 No. 1. https://doi.org/10.1108/ajems.2013.43904aaa.001

Infrastructure and development in Africa

Article Type: Editorial From: African Journal of Economic and Management Studies, Volume 4, Issue 1

Investments in physical and social infrastructure (including human capital) play a key role in the economic development process of all nations (Tallman and Wang, 1992; Materu, 2007; Bloom et al., 2006). It has therefore been argued that the persistent sluggish economic growth in Sub-Sahara Africa (SSA) can be attributed partly to low investments in infrastructural facilities such as energy, health, education, transport and communicational services (Appleton and Balihuta, 1996; Appleton and Teal, 1998). The papers in the present volume of AJEMS highlight some of the current infrastructural weaknesses in SSA and the implications they carry for economic growth on the sub-continent. They also provide policy directions on how to move these investments forward.

In the first paper, Felix M. Edoho examines the challenges and opportunities for implementing information and communication technologies (ICT) in SSA. The main thrust of his argument is that basic systems for leveraging ICT for development in Africa are fragmented and uncoordinated. The paper therefore offers an integrated framework that can help countries to coordinate various components of internet services and enhance their contribution to economic growth. Anastassios Gentzoglanis examines the regulation of the electricity industry on the sub-continent, and observes that the energy access situation remains deplorable. This observation is consistent with recent United Nations estimates that put the number of people without access to electricity and modern fuels in SSA at 625 million people out of a total population of 900 million people (UNDP, 2009). In his view, a prerequisite for optimal use of resources in the energy sector is the development of effective regulatory mechanisms. The paper shows that there are three alternative regulatory systems available within the sector – the 1-G, 2-G and 3-G regulatory models. He concludes from a comparative analysis of the suitability of the three models that SSA countries can hardly adopt the 2-G and 3-G models because their effective usage requires very well developed institutional and regulatory capacities that most of these countries are not likely to develop in the foreseeable future. He, however, envisages the current trend towards the regionalization of the electricity markets in SSA and the creation of regional power pools to create conditions that may facilitate the application of more advanced models of regulation (2-G and/or 3-G) in the future.

Edward Nketiah-Amponsah and his colleagues write on the determinants of antenatal care usage in Ghana. Their paper is predicated on the understanding that maternal mortality remains one of Africa’s most tragic health problems today. Studies have shown that the health status of African mothers has consistently deteriorated over several decades, despite the general level of health improvements on the continent (Cornia and Mwabu, 1997). Recent estimates have shown that the maternal mortality rates in 31 SSA countries remain very high – ranging from 550 to 1,000 per 100,000 live births (WHO, 2010).

The Ghanaian study showed that the maternal mortality and morbidity rate in the country is about 560/per 100,000 in 2010, i.e. far above the MDG target of 185/per 100,000 by 2015. Factors such as wealth status, age, ownership of health insurance (in the case of rural expecting mothers), educational attainment, religion and region of residence are significant predictors of the utilization of antenatal care services in the country.

Recent studies have also shown that Africa’s economic growth hinges partly on the integration of the economies and linking them to the global economic structure. This is partly because internal demand in individual African countries and for the continent as a whole is too weak and volatile to sustain growth (Fafchamps et al., 2001).

Fortunately, African economies appear to be making some headway in their global economic integration process. A recent report on the business environment of the 20 largest Sub–Sahara African countries by Spring and Rolfe (2011) showed that most of the countries have experienced significant positive changes in their integration into the global economy. Exports have increased in many of the countries in recent years with the most significant increases (in 2009) registered in Uganda (147 per cent), Ghana (55 per cent), Cameroon (43 per cent), Ethiopia (43 per cent), Sudan (37 per cent), Namibia (36 per cent), and Senegal (28 per cent). These developments have stimulated academic interest in export management processes in Africa.

Rita Abban and her colleagues’ paper makes contribution to this growing body of knowledge by providing some insight into the export behaviour of non-traditional exporting firms in Ghana. The empirical evidence presented in the paper was derived from interviews with managers of ten non-traditional exporting companies. The results suggest that companies that are able to leverage resources from a composite of human, social, and physical capital and can, at the same time, tap resources from contextual factors (such as institutions and supply chain complexity), are likely to experience above average export performance.

Omotayo Oyeniyi argues in his paper that marketing performs an important multiplier role in any economic development process, by ensuring efficient physical distribution of goods and services within and between countries and thereby enhancing the productivity of entire economic systems. Thus, the more market-oriented the economic entities of a nation are, the greater the nation’s economic growth potential.

One commonly adopted definition of market orientation is the generation of market intelligence pertaining to current and future customer needs, dissemination of intelligence across economic units, and responsiveness to the intelligence generated. The paper suggests that organizational commitment affects market orientation positively and that top management belief and the organizational reward systems are important in the implementation of market-oriented strategies.

Rakshit Negi and Eyob Ketema write about customer-perceived relationship quality and satisfaction within Ethiopian telecommunication corporation. They examine the extent to which relationship marketing constructs of trust, commitment, communication, and conflict handling influence perceived quality of customer relationship and satisfaction in the company. The results of the study showed that trust and quality of communication strongly influenced the degree of customer satisfaction. Trust and communication, in turn, depended on such variables as consistency in providing quality services, fulfilling obligations and promises to customers, and timely delivery of trustworthy information.

Stephen Kasumba writes on “A new dimension to neo-institutional sociology: some evidence from the adoption of new budgetary practices in local governments in Uganda”. He builds the paper on the understanding that budgeting is an important component of any successful economic activity since it ensures that governments, organizations and firms keep control over their incomes and expenditures. But while budgeting indisputably yields helpful information and facilitates communication among people from different levels of an organization or institution, it also embodies human-relations challenges.

He investigates the extent to which institutional pressures can be deployed to reinforce each other in creating and sustaining new budgetary practices. He uses data from archival records and official documents as well as in-depth semi-structured interviews with various officials, including those in local governments, central government and aid agencies which had significant influence in changing of the institutional practices of local governments in Uganda. The study revealed interconnections and various layers of institutional pressures that have influenced the adoption of new budgetary practices in local governments in Uganda.

Edwin Etieyibo provides a research commentary on privatization policies in Nigeria. His reflective comments examine some of the strengths and weaknesses as well as successes and failures of the divesture of state-owned enterprises (SOEs) in Nigeria and provide policy implications for Nigeria, in particular, and for SSA in general. He argues that privatization has boosted foreign investment in Nigeria (as evident from the divesture of the state-owned steel and mill companies in Jos, Oshogbo, Katsina, Delta and Abeokuta). The expansion in the number and quality of shareholders also meant growth in the Nigerian capital market. But there is evidence of naked corruption as well. In his view, a way out of the corruption problem is partly to establish an institutional infrastructure that includes anti-trust laws and a robust regulatory framework. He also suggests that privatization policies in the country must encourage mass participation and transparency and must device practical ways of attracting quality foreign investment.

Each of the above papers makes significant contribution to knowledge about issues addressed. And together, they jointly raise our awareness of some of the challenges that SSA countries still face on their economic growth path.

John Kuada