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Infrastructure investment crucial for economic revival - IMF

2020-09-09  Maihapa Ndjavera

Infrastructure investment crucial for economic revival - IMF
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According to the International Monetary Fund (IMF), public infrastructure investment will play a key role in the ability for countries to recover from the pandemic. 
Last week, President Hage Geingob carried out an inspection of progress on major infrastructure investments, particularly the dual carriage roads to Hosea Kutako International Airport and Okahandja. 

During the inspection, Geingob said he was pleased with the progress made thus far and said he looks forward to the completion of these roads in the near future. 
He further mentioned that infrastructure development creates much-needed jobs and therefore accelerates and enables economic activity and growth. 
Some 37 kilometres of the Windhoek - Okahandja dual carriageway was completed by September last year and the remaining 21 kilometres stretch towards Okahandja is expected to be complete by 2022.

Covid-19 has had a profound impact on people, firms, and economies all over the world. While countries have ramped up public lifelines to individuals and firms they will face enormous challenges to recover from the pandemic, amidst low economic activity and unprecedented levels of debt.
The IMF has also urged countries to end waste in public investment and create quality infrastructure with specific actions to improve infrastructure governance. 
It stressed that to rebuild economies in the wake of the Covid-19 pandemic, this will be more important than ever.
According to IMF, the economic recovery from Covid-19 presents a unique opportunity for countries to build a bridge to the future through well-designed and well-implemented public infrastructure.

“Done right, public investment to stimulate weak aggregate demand can help boost more inclusive growth, reduce inequalities, and create economic opportunities for all. Investment in health systems, digital and environmentally-conscious infrastructure can improve people’s lives, connect markets, and improve the resilience of countries to climate change and future pandemics,” reads IMF’s statement.
The fund further advised countries of the need to increase public investment to attain Sustainable Development Goals (SDGs), while advanced economies need to tackle aging infrastructure like roads, bridges, and healthcare systems.

Even though resources are tight, the fund states that governments need to spend taxpayers’ money wisely on the right projects. 
“For this, countries need good infrastructure governance, strong institutions and frameworks to plan, allocate, and implement quality public infrastructure.”
According to the IMF analysis, on average, countries waste about one-third of their infrastructure spending due to inefficiencies.
 It stated that these losses can surpass a staggering 50% in low-income countries. 

“Unlocking this potential should play an important role as countries recover from the pandemic. 
The good news is that efficiency losses and wasteful spending in infrastructure are not inevitable. Our estimates show that over half of these losses could be made up through better infrastructure governance,” the IMF elaborated. -

2020-09-09  Maihapa Ndjavera

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