Infrastructure is typically under-funded-that is, most countries are not investing enough to meet infrastructure needs and support economic growth, suggesting economically beneficial projects are not being implemented. This problem is particularly prevalent in developing countries.
Various studies have identified and tried to quantify this 'funding gap'. For example:
• In 2010, the World Bank's diagnostic study of infrastructure in Africa estimated that Sub-Saharan Africa needed to spend US$93 billion a year on infrastructure, of which only US$45 billion was already being met through existing sources-such as government spending, user charges, private sector investment, and other external sources-creating a total funding gap of US$48 billion [#106, pages 6-9, and 65-86]
• According to the 2013 IDB infrastructure strategy, the additional investment needed in infrastructure in Latin America amounted to US$100 billion per year-2 percent of regional GDP [#152]
• This funding gap is not unique to developing countries-a 2007 OECD report on Infrastructure to 2030 identified a widening gap between the infrastructure investment needed for the future and the capacity of the public sector to meet those requirements from traditional sources [#192, Chapter 1].
• McKinsey [#179] estimates $57 trillion in infrastructure investment will be globally required between 2013 and 2030-simply to keep up with projected global GDP growth. The $57 trillion required investment is more than the estimated value of today's worldwide infrastructure.
As noted in the World Bank Africa infrastructure diagnostic study referenced above, the funding gap can itself be a symptom of other problems in infrastructure delivery. The authors found that US$17 billion, or 35 percent of the funding gap, can be attributed to inefficiency in existing spending due to poor governance, poor planning of investments, under-investment in maintenance, under-charging for services, and operating inefficiencies [#106, pages 65-86].